A Reason for Using Capacity Available Instead of Capacity Used

question 108

Multiple Choice

A reason for using capacity available instead of capacity used when allocating fixed costs from service departments to producing departments is ________.

• A)actual usage by user departments does not affect short run allocations to other user departments
• B)actual usage by user departments does not affect long run allocations to other user departments
• C)the allocation methods to assign service department costs to producing departments are inaccurate
• D)the allocation methods to assign service department costs to producing departments are not available

---

Definitions:

Supply Chain Profits

The total profit or financial gain generated through the integrated activities of procuring materials, transforming them into finished goods, and delivering them to customers.

Variability

The quality of being subject to change or variance in a process or outcome, often impacting predictability and consistency.

Uncoordinated Supply Chain

A supply chain where the actions and operations of participants are not synchronized, leading to inefficiencies and potential disruptions.

Supply Chain Profits

Represent the total earnings generated throughout the entire supply chain, from raw material suppliers to the final retailer.