A Rational and Systematic Allocation Base for Service Department Costs

question 118

Multiple Choice

A rational and systematic allocation base for service department costs should reflect the cost accountant's consideration of all of the following except

• A)the ability of revenue-producing departments to bear the allocated costs.
• B)the benefits received by the revenue-producing department from the service department.
• C)a causal relationship between factors in the revenue-producing department and costs incurred in the service department.
• D)all of the above are considerations.