Use the Information Below to Answer the Following Question(s)

question 74

Multiple Choice

Use the information below to answer the following question(s) .Low-Cost Rentals Ltd.incurred $60,000 of common fixed costs and $90,000 of common variable costs.Data are provided below for the capacity allowed and the capacity used. For both departments, common fixed costs are to be allocated on the basis of capacity available and common variable costs are to be allocated on the basis of capacity used.
-An advantage to using budgeted usage, rather than actual usage, for the allocation base is that

• A)ASPE/IFRS requires it for comparability to previous years.
• B)variable costs are lower.
• C)management does not have to be accountable for actual costs since the system only deals with budgeted costs.
• D)it is consistent with a short-run time horizon.
• E)user divisions will know their allocated costs in advance.

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Definitions:

HDC (Holder in Due Course)

A party possessing a negotiable instrument, like a check, who has taken it in good faith and for value, and thus has certain protections.

Negotiable Instrument

A legal document guaranteeing the payment of a specific amount of money, either on demand or at a set time, with the transferable right to receive the payment.

Thief

An individual who steals property belonging to another, with the intent to permanently deprive the owner of it.

Impliedly Promises

refers to commitments or guarantees that are not explicitly stated but are inferred from actions, circumstances, or the nature of an agreement.