Departmental rates are appropriate when all the following exist except:

Question

Quizplus · Accepted Answer

Departmental rates are appropriate when departments have similar cost drivers and cost usage characteristics. If departments have different cost drivers or usage characteristics, then using departmental rates may not accurately allocate costs to products or services. The other options listed (A, B, C, and E) are factors that may indicate that departmental rates are appropriate.

Departmental Rates Are Appropriate When All the Following Exist Except