A Reason for Using Capacity Available Instead of Capacity Used

question 106

Multiple Choice

A reason for using capacity available instead of capacity used when allocating budgeted fixed costs from service departments to user departments is ________.

• A) actual usage by user departments does not affect short run allocations to other user departments
• B) actual usage by user departments does not affect long run allocations to other user departments
• C) that the allocation methods to assign service department costs to producing departments are inaccurate
• D) that the allocation methods to assign service department costs to producing departments are not available