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    Introduction to Management Accounting Study Set 3
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    Exam 12: Cost Allocation
  5. Question
    Allocating Fixed Costs on the Basis of Long- Range Plans
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Allocating Fixed Costs on the Basis of Long- Range Plans

Question 78

Question 78

Multiple Choice

Allocating fixed costs on the basis of long- range plans may inadvertently encourage managers to:


A) underutilize available capacity
B) underestimate planned usage
C) overestimate planned cost
D) overestimate planned usage

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