A Key Disincentive Effect of Departmental Cost Allocation Can Occur

question 51

Multiple Choice

A key disincentive effect of departmental cost allocation can occur when:

• A)allocated costs are less than external purchase costs.
• B)managers do not understand the incentives in the allocation base.
• C)the allocation base is actual usage.
• D)the allocation base is budgeted usage.
• E)the allocation base is greater than usage.

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Definitions:

PERT Chart

A tool for managing projects that helps plan, arrange, and oversee tasks involved in a project.

Defining Project Objectives

The process of identifying and establishing clear, measurable, and achievable goals at the beginning of a project.

Project Management

The application of knowledge, skills, tools, and techniques to project activities to meet the project requirements.

Organizations

Groups or institutions comprising individuals working together to achieve common goals or objectives.