When Actual Cost-Allocations Rates Are Used, Which of the Following

question 74

Multiple Choice

When actual cost-allocations rates are used, which of the following would be true?

• A) user divisions pay for costs that exceed budgeted amounts
• B) managers of the supplier division are motivated to improve efficiency
• C) user divisions are unaware of the allocated amounts until the end of the budget period
• D) managers know with certainty the rates to be used in that budget period

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Definitions:

Child and Dependent

Terms used in tax law to refer to individuals for whom the taxpayer provides more than half of financial support, qualifying the taxpayer for certain deductions.

Care Expense Credit

A tax credit available for expenses incurred in caring for a qualifying individual to allow the taxpayer to work or look for work.

AGI

Adjusted Gross Income, which is gross income minus adjustments; a key measure used to determine tax liabilities and eligibility for credits.

EIC

Earned Income Credit; a refundable tax credit in the U.S. for low to moderate-income working individuals and families, particularly those with children.