Variable Service Department Costs Should Be Charged to Operating Departments

question 42

Multiple Choice

Variable service department costs should be charged to operating departments at the end of the period according to the formula:

• A) Budgeted rate x Budgeted activity.
• B) Budgeted rate x Actual activity.
• C) Actual rate x Actual activity.
• D) Budgeted total cost x Percentage of peak-period capacity required.

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Definitions:

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