What Is the Second Step in Allocating Service Department Costs

question 20

Multiple Choice

What is the second step in allocating service department costs to production departments?

• A)Assign overhead costs that are directly attributable to a service or production department.
• B)Allocate other overhead costs based on appropriate cost drivers.
• C)Allocate service department costs to production departments.
• D)None of the answers is correct.

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Definitions:

Law Of Demand

A fundamental economic principle stating that, all else being equal, as the price of a good or service decreases, consumer demand for it will increase, and vice versa.

Price

The quantity of currency projected, called for, or dispensed as remuneration for something.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price in a specific period.

Maximum Wage Law

Legislation that sets an upper limit on the amount of money that can be earned by employees in a specific period.