A disadvantage of allocating fixed costs using a budgeted rate and actual usage is that
A)supplying division managers may be tempted underestimate usage.
B)the allocation would capture the cause-and-effect relationship.
C)variation in usage will result in variances that need to be managed.
D)changes in one department's usage should not affect another department's allocation.
E)some organizations offer rewards to managers who make accurate forecasts.

Question

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The Answer of A disadvantage of allocating fixed costs using a budgeted rate and actual usage is that
A)supplying division managers may be tempted underestimate usage.
B)the allocation would capture the cause-and-effect relationship.
C)variation in usage will result in variances that need to be managed.
D)changes in one department's usage should not affect another department's allocation.
E)some organizations offer rewards to managers who make accurate forecasts.

A Disadvantage of Allocating Fixed Costs Using a Budgeted Rate