To Discourage Unnecessary Use of a Support Department, Management Might

question 100

Multiple Choice

To discourage unnecessary use of a support department, management might:

• A)not allocate any support department costs to user departments
• B)allocate support department costs based upon user department usage
• C)allocate a fixed amount of support department costs to each department regardless of use
• D)issue memos on useful services provided by the support department

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Definitions:

Service Department Allocations

The process of distributing indirect costs from service departments to producing departments based on their usage of services.

Service Department Allocations

The process of distributing the costs of service departments to producing or operating departments based on their usage of services.

Service Department Charge Rate

The rate at which internal service departments charge other parts of the same organization for the services rendered.

Accounting Department

The division within a company responsible for managing financial records, ensuring compliance with accounting standards, and producing financial statements.