Service Department Costs Are Allocated to User Departments, in Part

question 128

Multiple Choice

Service department costs are allocated to user departments, in part, because:

• A) it measures the use of plant capacity.
• B) it helps ensure that machines are operating efficiently.
• C) user departments use the functions of service departments.
• D) service departments are final cost centers.

---

Definitions:

Information

Processed data that is meaningful and useful for decision-making.

Financial Flows

The movement of money between entities, businesses, or within the financial markets.

Inventory Velocity

Inventory velocity refers to the speed at which inventory is sold or turned over in a given period, indicating the efficiency of inventory management and effectiveness in meeting market demand.

Supply Chain

A system of organizations, people, activities, information, and resources involved in moving a product or service from supplier to customer.