When budgeted cost-allocations rates are used ________.
A) user departments are not informed about the charges until the end of the period which makes decision making during the period difficult
B) user departments can determine the amount of service to request and if allowed, can determine whether to use an internal or external resource
C) user divisions pay for costs that exceed budgeted amounts
D) user divisions pay for inefficiencies of the supplier department

Question

Quizplus · Accepted Answer

Budgeted cost-allocations rates allow user departments to make informed decisions about the amount of service they require and whether to use internal or external resources. It does not involve charging for costs that exceed budgeted amounts, nor does it hold user divisions accountable for the inefficiencies of supplier departments. However, it provides information to user departments so that they can control their costs and make more efficient use of resources.

When Budgeted Cost-Allocations Rates Are Used ________