(Appendix 12B)For performance evaluation purposes, the variable costs of a service department should be charged to operating departments using:
A)the actual variable rate and the budgeted level of activity for the period.
B)the budgeted variable rate and the actual level of activity for the period.
C)the budgeted variable rate and the budgeted level of activity for the period.
D)the actual variable rate and the peak-period or long-run average servicing capacity.

Question

Quizplus · Accepted Answer

Using the budgeted variable rate and the actual level of activity allows for a fair assessment of performance by comparing actual usage against expected costs, isolating variances due to efficiency or inefficiency.

(Appendix 12B)For Performance Evaluation Purposes, the Variable Costs of a Service