We used a lump-sum allocation method for fixed costs a few years ago, but we gave it

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“We used a lump-sum allocation method for fixed costs a few years ago, but we gave it up because managers always predicted usage below what they actually used.” Is this a common problem? How might it be prevented?

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Management Accounting

ISBN: 978-0132570848

6th Canadian edition

Authors: Charles T. Horngren, Gary L. Sundem, William O. Stratton, Phillip Beaulieu

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Question Posted: Jul 01, 2019 08:27 AM

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We used a lump-sum allocation method for fixed costs a few years ago, but we gave it

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The motivation to underestimate longrun usage is a ...View the full answer

Management Accounting

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