An Advantage to Using Budgeted Usage,rather Than Actual Usage,for the Allocation

question 99

Multiple Choice

An advantage to using budgeted usage,rather than actual usage,for the allocation base is that

• A)GAAP/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.