When allocating fixed costs, a predetermined lump-sum allocation based on budgeted usage should be used.

Name: When allocating fixed costs, a predetermined lump-sum allocation based on budgeted usage should be used.
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Question

Quizplus · Accepted Answer

Allocating fixed costs using a predetermined lump-sum based on budgeted usage helps in planning and controlling costs by distributing them evenly over the budget period, ensuring that each department or product bears a fair share of the fixed costs based on expected usage.

When Allocating Fixed Costs, a Predetermined Lump-Sum Allocation Based on Budgeted