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Part $1$

Identify the$$reason$($s$)$ why most organizations use an annual period rather than a weekly or monthly period to compute budgeted$$indirect$-$cost rates.

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Part $1$

A$.$

The numerator

reasonlong dash$$the

longer time$$period$,$ the less influence of seasonal patterns in indirect$($overhead$)$ costs.

B$.$

The denominator

reasonlong dash$$the

longer the time$$period$,$ the less the effect of variations in output levels or quantities of the$$cost$-$allocation bases on the allocation of fixed costs.

C$.$

Time is needed to collect data on all of the costs and a weekly or monthly period is not long enough to gather the information needed.

D$.$

Both A and B$.$