Which of the Following Statements About Service Department Costs Is

question 53

Multiple Choice

Which of the following statements about service department costs is not true?

• A) Service department costs include the costs of providing services to other departments within an organization.
• B) Service department costs are not allocated to other service departments.
• C) Service department costs should be allocated using an allocation base or cost driver related to the costs incurred.
• D) Service department costs do not include the costs of providing services to external customers.

---

Definitions:

Deadweight Loss

The loss of economic efficiency that can occur when the equilibrium for a good or a service is not achieved or is not achievable.

Tax Revenues

The income that is gained by governments through taxation, which is then used to fund public services and infrastructure.

Deadweight Loss

The loss of economic efficiency that occurs when the equilibrium outcome is not achievable or not achieved in a market.

Tax Revenue

The financial earnings acquired by governments via taxation.