FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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In the single rate method used in the support division cost allocation, when budgeted cost-allocations rate is used:
O user/operating divisions pay for inefficiencies of the supplier/support department
O user/operating divisions pay for costs that exceed budgeted amounts
O the manager of the supplier/support division bears the risk of unfavorable cost variances
O variations in actual usage by one operating division affect the costs allocated to other operating divisions
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Transcribed Image Text:In the single rate method used in the support division cost allocation, when budgeted cost-allocations rate is used: O user/operating divisions pay for inefficiencies of the supplier/support department O user/operating divisions pay for costs that exceed budgeted amounts O the manager of the supplier/support division bears the risk of unfavorable cost variances O variations in actual usage by one operating division affect the costs allocated to other operating divisions
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