Budgeted amounts of allocation bases, rather than actual amounts, are preferable allocation bases because:

1when actual amounts are used the behaviour of one responsibility centre affects the costs allocated to other responsibility centres.

2budgeted amounts are known in advance, therefore costs are easier to allocate.

3the use of actual amounts could cause fluctuations in the prices charged for a company's products or services.

4budgeted amounts are known in advance, therefore costs are easier to allocate AND the use of actual amounts could cause fluctuations in the prices charged for a company's products or services.