Describe Service Technology

question 205

Essay

Describe service technology.

Differentiate between direct and indirect expenses and their role in calculating contributions to overhead.

Assess departments' performance based on departmental contribution to overhead.

Associate the allocation of joint costs to products using the value basis method.

Understand the application of performance measurement systems in assessing department or division performance.

---

Definitions:

Net Present Value

A method for evaluating the profitability of an investment, calculating the difference between the present value of cash inflows and outflows.

Monthly Interest Rate

The interest rate applied to a loan or debt for one month, often used to calculate the monthly interest payment.

Variable Cost

Costs that vary directly with the level of production or the volume of services provided.