The biggest advantage of using practical capacity to allocate costs is that it ________.
A) focuses the user's division with the costs of overused capacity
B) never causes over or under-allocated overhead
C) burdens the user divisions with the costs of unused capacity
D) focuses management's attention on unused capacity

Question

Quizplus · Accepted Answer

Using practical capacity to allocate costs highlights the amount of capacity that is not being used, thereby drawing management's attention to potential inefficiencies and opportunities for improvement.

The Biggest Advantage of Using Practical Capacity to Allocate Costs