Which of the Following Statements Regarding Service Costing Is True

question 20

Multiple Choice

Which of the following statements regarding service costing is true?

• A) Service costing is used by manufacturing firms only.
• B) Service costing is less relevant in a high uncertainty environment.
• C) Mass services firms are a type of service organisation.
• D) Mass shops are a type of service organisation.

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Definitions:

Number Of Employees

A count of all individuals working for a company, including both full-time and part-time staff.

Step-down Method

A cost allocation method used in managerial accounting to allocate overhead costs from service departments to producing departments.

Labor Hours

The total number of work hours spent by employees on production or service delivery.

Space Occupied

The area taken up or used by a business, organization, or equipment within a physical location.