Use the Information Below to Answer the Following Question(s)

question 173

Multiple Choice

Use the information below to answer the following question(s) .Low-Cost Rentals Ltd.incurred $60,000 of common fixed costs and $90,000 of common variable costs.Data are provided below for the capacity allowed and the capacity used. For both departments, common fixed costs are to be allocated on the basis of capacity available and common variable costs are to be allocated on the basis of capacity used.
-The costs of unused capacity are highlighted when

• A)actual usage based allocations are used.
• B)budgeted usage allocations are used.
• C)practical capacity based allocations are used.
• D)the dual-rate cost allocation method allocates fixed costs based on actual usage.
• E)variable cost variances are evaluated.

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Definitions:

Piece Rate

A payment method where employees are paid a fixed rate for each unit of production completed, rather than receiving a fixed salary.

Widgets

Generic term used for any hypothetical or generic product, often used in discussions or explanations about manufacturing or economics.

Performance Measure

Criteria or standards used to evaluate the effectiveness and efficiency of actions or outcomes.

Motivators

Factors that influence a person's desire and energy to be continually interested and committed to a job, role, or subject, or to make an effort to attain a goal.