Which of the Following Statements Is True Concerning Lump-Sum Allocations

Multiple Choice

Which of the following statements is true concerning lump-sum allocations of service department costs?

A) They make fixed costs appear to be variable to the manager receiving the allocation.
B) They are not affected by the activity level in the department receiving the allocation.
C) They make fixed costs appear to be variable to the manager receiving the allocation and are not affected by the activity level in the department receiving the allocation.
D) They do not make fixed costs appear to be variable to the manager receiving the allocation and are affected by the activity level in the department receiving the allocation