Under dual-cost allocation, fixed costs are allocated on the basis of a user department's:
A) long-run usage of a service department's output.
B) short-run usage of a service department's output.
C) long-run usage and short-run usage of a service department's output.
D) neither long-run usage nor short-run usage of a service department's output.
E) either long-run usage or short-run usage of a service department's output.

Question

Quizplus · Accepted Answer

Under dual-cost allocation, fixed costs are typically allocated based on the long-run usage of a service department's output to ensure that the allocation reflects the stable, predictable demand for services over time.

Under Dual-Cost Allocation, Fixed Costs Are Allocated on the Basis