Lump-sum allocations
A)generally changes year after year.
B)do not change when the activity levels of any of the user departments change.
C)are impacted by the usage of the allocated resource by other departments.
D)make fixed costs appear variable.

Question

Quizplus · Accepted Answer

Lump-sum allocations are fixed and do not change when the activity levels of any user departments change. This can lead to fixed costs appearing variable, however they are not impacted by the usage of the allocated resource by other departments. Lump-sum allocations are typically set for a fixed period of time, and may or may not change year after year depending on the organization's budgeting process.

Lump-Sum Allocations