Sunday, May 27, 2012

When budgeted cost-allocations rates are used

ACCOUNTING

Multiple Choice

When budgeted cost-allocations rates are used

a. variations in actual usage by one division affect the costs allocated to other divisions.

b. the manager of the supplier division bears the risk of unfavorable cost variances.

c. user divisions pay for costs that exceed budgeted amounts.

d. user divisions pay for inefficiencies of the supplier department.

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