When Choosing Between Using Budgeted Rates, and Actual Rates, Which

question 71

Multiple Choice

When choosing between using budgeted rates, and actual rates, which of the following is TRUE?

• A)Actual rates let users know in advance what their costs are.
• B)When budgeted rates are used, users must wait till the end of the budget period to know what their costs are.
• C)With actual rates, a support department, rather than a user department, bears the risk of unfavourable cost variances.
• D)Budgeted rates based on user department estimates may lead to outsourcing needed work, rather than relying on an internal support department.
• E)Budgeted rates may help the manager of a support department to improve efficiency.

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Definitions:

Papillary Layer

The outermost layer of the dermis, directly underneath the epidermis, characterized by its projections called papillae that contain capillaries and sensory neurons.

Dermis

The thick layer of living tissue below the epidermis that forms the true skin, containing sweat glands, hair follicles, and connective tissue.

Hypodermis

Also known as subcutaneous tissue, it's an underlying layer of fat and connective tissue beneath the dermis.