Budgeted Cost Rates Are Used for Allocating Variable Costs of Service

question 20

Multiple Choice

Budgeted cost rates are used for allocating variable costs of service departments to user departments because ________.

• A)it protects user departments from intervening price fluctuations
• B)it protects user departments from inefficiencies in service departments
• C)it protects managers in producing departments from uncontrollable costs
• D)all of the above

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Definitions:

Taxes

Compulsory financial charges or some other type of levy imposed upon a taxpayer by a governmental organization in order to fund government spending and various public expenditures.

Northern Mexico

A geographical region of Mexico, often characterized by its vast deserts, maquiladoras (manufacturing plants), and proximity to the United States border.

Electronics Firms

Companies that specialize in designing, manufacturing, selling, or distributing electronic devices and components.

NAFTA

The North American Free Trade Agreement, a treaty between Canada, Mexico, and the United States that eliminated most tariffs and trade barriers between the countries.