Consider the following statements about support department cost allocations.
i. The allocation of actual costs encourages support department managers to control the costs in their departments.
ii. When budgeted costs are allocated, any efficiency in support department operations are passed along to user departments.
iii. The allocation of budgeted costs rather than actual costs gives an incentive for support department managers to control costs in their departments.
Which statement/s is/are true?
A) i
B) ii
C) i and ii
D) iii

Question

Quizplus · Accepted Answer

Allocating budgeted costs rather than actual costs provides a clear target for support department managers, encouraging them to control and potentially reduce costs to meet these budgeted figures. This approach helps in planning and controlling costs within an organization.

Consider the Following Statements About Support Department Cost Allocations