Which of These Is a Limitation of Allocating Support Department

question 23

Multiple Choice

Which of these is a limitation of allocating support department costs?

• A) identifying appropriate cost pools
• B) the subjective nature of the exercise
• C) the possibility of managers mistakenly believing that allocated costs are variable
• D) all of the above are limitations

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Definitions:

High Quality

A characteristic of products or services that meet or exceed the expectations of consumers, often associated with durability, reliability, and excellence.

Marginal Benefit

The additional benefit received from consuming one more unit of a good or service.

Marginal Social Cost

The additional cost to society as a whole from producing one more unit of a good or service, including both private costs and externalities.

Marginal Revenue

Change in revenue resulting from a one-unit increase in output.