Which of the following would be considered the biggest advantage of using practical capacity to allocate costs?
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

Practical capacity allocation helps in highlighting unused capacity, thereby drawing management's attention to inefficiencies and potential areas for improvement. This approach aids in better decision-making regarding capacity utilization and operational efficiency.

Which of the Following Would Be Considered the Biggest Advantage