Which of the Following Companies Is Following a Policy with Respect

question 50

Multiple Choice

Which of the following companies is following a policy with respect to the costs of service departments that is not recommended?

• A) To charge operating departments with the depreciation of forklifts used at its central warehouse, Shalimar Electronics charges predetermined lump-sum amounts calculated on the basis of the long-term average use of the services provided by the warehouse to the various segments.
• B) Manhattan Electronics uses the sales revenue of its various divisions to allocate costs connected with the upkeep of its headquarters building.
• C) Rainier Industrial does not allow its service departments to pass on the costs of their inefficiencies to the operating departments.
• D) Golkonda Refinery separately allocates fixed and variable costs incurred by its service departments to its operating departments.

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Definitions:

Customer Service

The support and assistance provided by a company to those who buy or use its products or services.

Training Commitment

The dedication and effort an organization or individual is willing to invest in the development and implementation of training programs.

Total Quality Management

A management approach focused on continuous improvement of products, services, and processes by considering the input of all members of an organization.

Continuous Improvement

A method of constantly seeking ways to improve services, processes, or products through incremental adjustments or significant breakthroughs.