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Budgeted Cost Rates Are Used for Allocating Variable Costs of Service

Question 36

Multiple Choice

Budgeted cost rates are used for allocating variable costs of service departments to user departments because ________.


A) it provides service departments a greater incentive to be efficient
B) it protects user departments from inefficiencies in service departments
C) it protects managers in service departments from inflation
D) A and B

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