Consider the following statements about dual-cost allocation: I. Dual-cost allocation prevents a change in the short-run activity of one department from affecting the cost allocated to another department. II. Dual-cost allocations create an incentive for user department managers to understate their expected long-run service needs. III. Dual-cost allocations are generally preferred over lump-sum allocations, or those that combine variable and fixed costs together. Which of the above statements is (are) true?

I only.

III only.

I and II.

II and III.

I, II, and III.

Please show work