Multiple Choice
Which of the following is a disadvantage for using budgeted costs instead of actual costs for support department cost allocation?
A) Managers know their exact costs in advance and have no incentive to minimize use of services.
B) Budgeted costs do not reflect current usage, and so managers may overuse support services.
C) Allocated support department costs are not under the manager's control.
D) Support departments might be cut back because services are likely to be underused.
Correct Answer:
Verified
Correct Answer:
Verified
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