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A. Using actual rather than budgeted cost rates would hold using department managers responsible for costs beyond their control and provide less incentive for service
A. Using actual rather than budgeted cost rates would hold using department managers responsible for costs beyond their control and provide less incentive for service departments to be efficient. Both effects are undesirable. B. Using budgeted rather than actual cost rates protects the using departments from inefficiencies in the service departments and from intervening price fluctuations. C. It also may also reduce the resentment of user managers. User department managers sometimes complain more vigorously about uncertainty over allocations and the poor cost control in a service department than about the choice of a cost-allocation base. D. All of the above. Why should budgeted cost rates, rather than actual cost rates, be used for allocating the variable costs of service departments? O O O
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