Budgeted Amounts of Allocation Bases, Rather Than Actual Amounts, Are

question 26

Multiple Choice

Budgeted amounts of allocation bases, rather than actual amounts, are preferable allocation bases because:

• A) when actual amounts are used the behaviour of one responsibility centre affects the costs allocated to other responsibility centres.
• B) budgeted amounts are known in advance, therefore costs are easier to allocate.
• C) the use of actual amounts could cause fluctuations in the prices charged for a company's products or services.
• D) budgeted amounts are known in advance, therefore costs are easier to allocate AND the use of actual amounts could cause fluctuations in the prices charged for a company's products or services.

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Definitions:

Health Care Business

An enterprise that provides medical services, manufactures medical equipment, or engages in healthcare-related activities.

Bankruptcy

A legal status of a person or entity that cannot repay debts owed to creditors, leading to legal proceedings to resolve the financial issues.

Patient Records

Patient records are detailed and confidential documents that contain the medical history, treatments, and health information of individuals under care.

Trustee

A person or firm that holds and administers property or assets for the benefit of a third party.