Which of the following is the least practical reason for allocating service department costs to userdepartments?a) to evaluate performance of managers and divisionsb) to make operating departments aware that services are costly and must beused efficientlyc) to determine profitability of operating departmentsd) to determine profitability of support departments

Allocating service department costs refers to the process of distributing or assigning the indirect…

Which of the following is the least practical reason for allocating service department costs to user departments? a) to evaluate performance of managers and divisions Ob) to make operating departments aware that services are costly and must be used efficiently Oc) to determine profitability of operating departments d) to determine profitability of support departments

Which of the following is the least practical reason for allocating service department costs to user departments? a) to evaluate performance of managers and divisions Ob) to make operating departments aware that services are costly and must be used efficiently Oc) to determine profitability of operating departments d) to determine profitability of support departments

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Is it true that the direct method is a method of cost allocation that charges costs of service departments to production departments and ignores any services used by other service departments?
Determining the basis used to allocate support department costs follows which guideline? O Profit maximization O Revenue generation O Goal comparison O Cause and effect
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which cost allocation method to use to serve better support direct cost to producing departments?