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Operating department managers will only use an external provider of material-handing services if it costs more than the variable rate cost per hour (S40 in ou under the dual-rate method. By charging the fixed costs of resources budgeted to be used by the operating departments as a lump sum, the dual-rate method succeeds in removing fixed The dual-rate method guides department managers to make decisions that benefit both the organization as a whole and each department because it signals t Operating department managers will only use an external provider of material-handling services if it costs less than the variable rate cost per hour (520 in our under the single-rate method. Allocating fixed costs based on budgeted usage helps user departments with both short-run and long-run planning because user departments know the costs planning horizon; budgeted usage measures the long-run demands of the user departments for support-department services. By charging the fixed costs of resources budgeted to be used by the operating departments as a lump sum, the dual-rate method succeeds in removing varial

Operating department managers will only use an external provider of material-handing services if it costs more than the variable rate cost per hour (S40 in ou under the dual-rate method. By charging the fixed costs of resources budgeted to be used by the operating departments as a lump sum, the dual-rate method succeeds in removing fixed The dual-rate method guides department managers to make decisions that benefit both the organization as a whole and each department because it signals t Operating department managers will only use an external provider of material-handling services if it costs less than the variable rate cost per hour (520 in our under the single-rate method. Allocating fixed costs based on budgeted usage helps user departments with both short-run and long-run planning because user departments know the costs planning horizon; budgeted usage measures the long-run demands of the user departments for support-department services. By charging the fixed costs of resources budgeted to be used by the operating departments as a lump sum, the dual-rate method succeeds in removing varial

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Some advantages of the dual-rate method are: (Select all that apply.) O A. Operating department managers will only use an external provider of material-handling services if it costs more than the variable rate cost per hour ($40 in our scenario here) charged by the Materials Management Department. The single-rate method therefore avoids the potential conflict of interest that can arise under the dual-rate method. O B. By charging the fixed costs of resources budgeted to be used by the operating departments as a lump sum, the dual-rate method succeeds in removing fixed costs from the operating department managers' consideration when making marginal decisions to outsource services. O C. The dual-rate method guides department managers to make decisions that benefit both the organization as a whole and each department because it signals to department managers that variable costs and fixed costs behave differently. O D. Operating department managers will only use an external provider of material-handling services if it costs less than the variable rate cost per hour (S20 in our scenario here) charged by the Materials Management Department. The dual-rate method therefore avoids the potential conflict of interest that can arise under the single-rate method. O E. Allocating fixed costs based on budgeted usage helps user departments with both short-run and long-run planning because user departments know the costs allocated to them in advance. Companies commit to infrastructure costs (such as the fixed costs of a support department) on the basis of a long-run planning horizon; budgeted usage measures the long-run demands of the user departments for support-department services. OF. By charging the fixed costs of resources budgeted to be used by the operating departments as a lump sum, the dual-rate method succeeds in removing variable costs from the operating department managers' consideration when making marginal decisions to outsource services.
Transcribed Image Text:Some advantages of the dual-rate method are: (Select all that apply.) O A. Operating department managers will only use an external provider of material-handling services if it costs more than the variable rate cost per hour ($40 in our scenario here) charged by the Materials Management Department. The single-rate method therefore avoids the potential conflict of interest that can arise under the dual-rate method. O B. By charging the fixed costs of resources budgeted to be used by the operating departments as a lump sum, the dual-rate method succeeds in removing fixed costs from the operating department managers' consideration when making marginal decisions to outsource services. O C. The dual-rate method guides department managers to make decisions that benefit both the organization as a whole and each department because it signals to department managers that variable costs and fixed costs behave differently. O D. Operating department managers will only use an external provider of material-handling services if it costs less than the variable rate cost per hour (S20 in our scenario here) charged by the Materials Management Department. The dual-rate method therefore avoids the potential conflict of interest that can arise under the single-rate method. O E. Allocating fixed costs based on budgeted usage helps user departments with both short-run and long-run planning because user departments know the costs allocated to them in advance. Companies commit to infrastructure costs (such as the fixed costs of a support department) on the basis of a long-run planning horizon; budgeted usage measures the long-run demands of the user departments for support-department services. OF. By charging the fixed costs of resources budgeted to be used by the operating departments as a lump sum, the dual-rate method succeeds in removing variable costs from the operating department managers' consideration when making marginal decisions to outsource services.
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