A company plans to create a new allocation rule for electric utilities expenses.
The allocation rule must meet the following requirements:
✑ Distribute overhead utility expense to each department.
✑ Define how and in what proportion the source amounts must be distributed on various destination lines.
You need to configure the allocation rule.
Which allocation method should you use?
To distribute overhead utility expenses to each department in specific proportions, you should use the 'Fixed weight' allocation method. This method allows for defining the allocation percentage or weight directly in the rule, so you can specify exactly how much of the source amount each department should receive.
B is correct. fixed weight (and fixed percentage if it was in the list of answers..)
B seems correct now
Correct Answer B : Fixed percentage and Fixed weight – For these methods, the allocation percentage or weight is defined directly for the rule. For example, advertising expenses can be allocated so that Department A receives 70 percent of the advertising expense and Department B receives 30 percent. Ref : https://docs.microsoft.com/en-us/dynamics365/finance/general-ledger/ledger-allocation-rules
I believe B is correct, from the source document "Fixed weight – For these methods, the allocation percentage or weight is defined directly for the rule. For example, advertising expenses can be allocated so that Department A receives 70 percent of the advertising expense and Department B receives 30 percent." All of the types have the Destination Component that lets you separate into lines. The only difference with Basis is that you can base amounts off of leger balances, which is not mentioned in the question.
I think D, "Basis – This variable method is used when the allocation depends on the actual ledger balance, based on filter criteria. For example, advertising expenses can be allocated based on each department's sales in proportion to the total departmental sales"
D. Basis is indeed correct It is all about the word 'proportion' https://docs.microsoft.com/en-us/dynamics365/finance/general-ledger/ledger-allocation-rules
I agree with you, but I hate that I agree with you. I know that to make heads or tails you have to read the documentation very closely, and I know that it is logical that, because the docs use the word "proportion" when describing Basis, that that is a clue. However, it goes without saying that any allocation method will be a proportion. Just a really poorly worded question.
D. Basis This variable method is used when the allocation depends on the actual ledger balance, based on filter criteria. For example, advertising expenses can be allocated based on each department's sales in proportion to the total departmental sales.
Allocation depends on the actual ledger balance, in proportion. The requirement mentions "what proportions " and .....
A & B are also correct answers here IMO
ABC are types of Basis (D)
D is the right answer. Verified below https://docs.microsoft.com/en-in/learn/modules/configure-ledger-allocations-accruals-dyn365-finance/3-ledger-allocation-rule
The link does not prove that D is the right answer. The only options where you can specify what proportion the source amounts must be distributed on various destination lines is Fixed weight and Fixed percentage. Given that fixed percentage is not an option and Fixed weight is, then the answer has to be B. Basis allocates based on ledger balances on GLs that you specify in Source. You cannot specify the proportions like you can with Fixed weight.
I don't believe that they are, as they are listed in parallel as different allocation methods. That said, D is still right. Basis is like a proportionality that varies depending on actual ledger balance
The link does not prove that D is the right answer. The only options where you can specify what proportion the source amounts must be distributed on various destination lines is Fixed weight and Fixed percentage. Given that fixed percentage is not an option and Fixed weight is, then the answer has to be B. Basis allocates based on ledger balances on GLs that you specify in Source. You cannot specify the proportions like you can with Fixed weight.
D seems correct
As the others don't fit and the question is a bit oddly structured, D is correct.
D It's not that "B" is wrong; it's a really poorly worded question. In practice you would usually use basis, or just skip the Allocation Rules altogether and use a Periodic entry.
Final verdict guys? B or D?
https://learn.microsoft.com/en-us/dynamics365/finance/general-ledger/ledger-allocation-rules
D is correct
Base on describtion in MS documentation: https://docs.microsoft.com/en-us/dynamics365/finance/general-ledger/ledger-allocation-rules, and way how question is created, I think D ir correct answer since this is definition of "Basis" allocation rule: This variable method is used when the allocation depends on the actual ledger balance, based on filter criteria. For example, advertising expenses can be allocated based on each department's sales in proportion to the total departmental sales.
Question said "what proportion the source amounts must be distributed on various destination lines." So, it must be Fixed weight or percentege. B
Okay, now I understand :), It's D.
Okay, now I understand :), It's D.
I believe D is the correct answer. Destination – This component defines how the result of the allocation calculation should be distributed and accounted for. For example, there can be one destination line for each department.
The Basis method allows you to define specific proportions or percentages for how the source amounts should be distributed across various destination lines, which aligns perfectly with your needs.
D as it aligns with the D365 product documentation
The requirement emphasizes the need to “define how and in what proportion” the source amounts are distributed, suggesting flexibility in determining the allocation logic. Utility expenses like electricity are often allocated based on measurable criteria (e.g., square footage, number of employees, or meter readings), which may vary over time or require data-driven calculations. The Basis method is better suited for such scenarios, as it allows the company to define a dynamic criterion (e.g., square footage or headcount) and automatically calculate proportions based on that data. Fixed weight could work if the company has fixed, unchanging proportions, but the requirement’s focus on defining proportions flexibly aligns more closely with Basis, especially for utility expenses where allocations often depend on variable factors.