For Performance Evaluation Purposes, Actual Service Department Costs Instead of Budgeted

question 22

True/False

For performance evaluation purposes, actual service department costs instead of budgeted service department costs should be allocated to operating departments.

---

Definitions:

Direct Labour Cost

The wages and other remunerations paid to employees directly involved in the manufacturing or production process.

Machine Hours

A measure of the total time that a machine is operated during a certain period, often used for allocating machine-related overheads.

Manufacturing Overhead Applied

The allocation of estimated manufacturing overhead costs to individual products or job orders based on a predetermined overhead rate.

Sales Salaries Expense

The total cost incurred for salaries, wages, and commissions paid to sales personnel, reflecting a company's investment in its sales force.