An allocation of a predetermined amount that is not affected by changes in the activity level of the organizational unit receiving the allocation is called a(n)
A)allocation base.
B)unitized cost.
C)lump-sum allocation.
D)cost driver.

Question

Quizplus · Accepted Answer

A lump-sum allocation is a fixed amount that is predetermined and not affected by changes in activity level, unlike allocation bases that are tied to specific unit measures of activity. Unitized cost is the cost per unit of a product or service, and cost driver is a factor that affects or causes the cost of an activity to change.

An Allocation of a Predetermined Amount That Is Not Affected