Piedmont Company Has One Service Department and Three Operating Departments

question 30

Multiple Choice

Piedmont Company has one service department and three operating departments.During a particular year,a substantial variance developed between the actual costs and the budgeted costs of the service department.For performance evaluation purposes,the variance should be:

• A)allocated to the operating departments on the basis of usage.
• B)allocated to operating departments,but on some basis other than usage.
• C)kept in the service department,and not charged to the operating departments at all.
• D)shared equitably among all departments.

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Definitions:

Spontaneous Activities

Unplanned actions or events that arise naturally or suddenly, without external coercion or predetermined structure.

Formal

Following or in accordance with established rules, procedures, or etiquette, often characterized by a clear structure or organization.

Organized

Characterized by systematic planning and coordinated effort, often referring to groups, activities, or structures.

Recreation

Activities done for enjoyment, leisure, or pleasure when one is not working.