Consider the following statements regarding cost allocation.i.Allocation of budgeted costs is preferred to actual cost as this minimises the possibility that the actions of one user department will affect the costs allocated to another user department
Ii)Allocation of standard budgeted rates is preferred,so the user department does not have to bear the inefficiencies of support departments.
Iii)Knowing the standard rates in advance allows the user departments to plan their activities with greater certainty.Which statement/s is/are true?
A) i
B) i and ii
C) i,ii and iii
D) ii and iii

Question

Quizplus · Accepted Answer

All three statements are true as they highlight the benefits of using budgeted or standard rates for cost allocation, which include minimizing inter-departmental cost impact, avoiding inefficiencies, and enabling better planning.

Consider the Following Statements Regarding Cost Allocation