All of a Service Department's Actual Costs Should Be Allocated

question 40

True/False

All of a service department's actual costs should be allocated or charged to operating departments to ensure that they are fully recovered.

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Definitions:

Average Product

The average amount of output produced per unit of a specific input, like labor or capital, over a certain period.

Diminishing Returns

The principle stating that if one factor of production is increased while others remain constant, the overall returns will initially increase but will eventually decrease after a certain point.

Unit Of Labor

A measure of labor input, often referred to as one hour of work by an employee or worker.

Law Of Diminishing Returns

An economic principle stating that if one factor of production is increased while others remain constant, the overall marginal returns will eventually decrease.