The predetermined lump-sum approach to allocating fixed costs is based on the short-run usage, regardless of actual usage from month to month.

Question

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The predetermined lump-sum approach to allocating fixed costs typically involves allocating costs based on estimated or budgeted usage over a specific period, rather than changing the allocation based on short-run or actual usage from month to month.

The Predetermined Lump-Sum Approach to Allocating Fixed Costs Is Based