When Actual Cost-Allocations Rates Are Used

question 141

Multiple Choice

When actual cost-allocations rates are used:

• A)user divisions pay for costs that exceed budgeted amounts
• B)managers of the supplier division are motivated to improve efficiency
• C)user divisions do not know allocated amounts until the end of the accounting period
• D)managers of the user divisions may be tempted to underestimate planned usage

---

Definitions:

Bonuses

Additional compensation given to employees as a reward for their performance, often based on achieving certain targets or goals.

Stock Exchange

A marketplace where securities, such as stocks and bonds, are bought and sold.

TSX

The TSX refers to the Toronto Stock Exchange, a major global exchange located in Canada, primarily featuring Canadian-based companies.

Listing Requirements

Listing requirements are the criteria established by stock exchanges that companies must meet to be listed and continue trading on the exchange.