A key disincentive effect of departmental cost allocation can occur when:
A)Allocated costs are less than external purchase costs
B)Managers do not understand the incentives in the allocation base
C)The allocation base is actual usage
D)The allocation base is budgeted usage
E)The allocation base is greater than usage

Question

Quizplus · Accepted Answer

The Answer of A key disincentive effect of departmental cost allocation can occur when:
A)Allocated costs are less than external purchase costs
B)Managers do not understand the incentives in the allocation base
C)The allocation base is actual usage
D)The allocation base is budgeted usage
E)The allocation base is greater than usage

A Key Disincentive Effect of Departmental Cost Allocation Can Occur