An allocation method used to control overall spending by a firm is called:
A) Soft rationing.
B) Hard rationing.
C) Incremental costing.
D) Marginal analysis.
E) Sensitivity analysis.

Question

Quizplus · Accepted Answer

Soft rationing is an allocation method used to control overall spending by a firm. It involves setting a spending limit that is lower than the total amount requested by the firm's departments. This forces the departments to prioritize their spending and to make trade-offs between different projects.

An Allocation Method Used to Control Overall Spending by a Firm