When actual cost-allocations rates are used:
A)managers of the supplier division are motivated to improve efficiency
B)user divisions do not know allocated amounts until the end of the accounting period
C)user divisions pay for costs that exceed budgeted amounts
D)managers of the user divisions may be tempted to underestimate planned usage

Question

Quizplus · Accepted Answer

When actual cost-allocation rates are used, the user divisions do not know the allocated amounts until the end of the accounting period because the actual costs are not known until they are incurred.

When Actual Cost-Allocations Rates Are Used