Consider the Following Statements About Support Department Cost Allocations

question 77

Multiple Choice

Consider the following statements about support department cost allocations.
i. The allocation of actual costs encourages support department managers to control the costs in their departments.
ii. When budgeted costs are allocated, any efficiency in support department operations are passed along to user departments.
iii. The allocation of budgeted costs rather than actual costs gives an incentive for support department managers to control costs in their departments.
Which statement/s is/are true?

• A) i
• B) ii
• C) i and ii
• D) iii