Internal Service Funds Primarily Serve Governmental Departments; Therefore They Are

question 88

True/False

Internal service funds primarily serve governmental departments; therefore they are not incorporated into the business-type activities category of the government-wide statements.

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Definitions:

Idle Capacity

The condition where equipment or workspaces are not being used to their full potential, often resulting in inefficiency and lost productivity.

Resource Consumption

The usage of resources such as materials, labor, and energy in the production of goods or services.

Activity-Based Costing

A cost distribution method that assigns overhead and indirect expenses to pertinent products and services based on their activity requirements.

Customer Margin

The profit derived from serving a particular customer, calculated as sales revenue minus the costs of servicing that customer.