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Why Do Organizations Use Budgeted Rates Instead of Actual Rates

question 112

Essay

Why do organizations use budgeted rates instead of actual rates to allocate the costs of support departments to each other and to user departments and divisions? Explain.


Definitions:

Interest Rate

The levy, stipulated as a percentage of the principal, made by lenders for borrowers employing their assets.

Account Balance

The amount of money present in a financial repository, such as a checking or savings account, at any given time.

Interest Rate

The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage rate.

Bank

A financial institution licensed to receive deposits, offer loans, and provide various financial services to individuals or businesses.

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