Chapter 14.2, Problem 4R

To determine

To evaluate: The importance of service charges along with the way they are determined.

Explanation of Solution

Service charges enable the owner to recover from the occupants the costs of maintaining and running the house, as well as from all others who profit from and use the services and facilities provided. It is vital to remember that service charges are only applied to recover the costs and their retention.

Fee for service is health care's most common payment mechanism where doctors and healthcare providers are compensated by government agencies and insurance firms, or individuals, depending on the number of services rendered, or the number of procedures ordered.

Based on the policy of the contract, service charges are usually decided by the freeholder, property manager, or probably by an independent player. That will state what commitment is expected of the individual leaseholders.

Economics Concept Introduction

Introduction: A service charge is a fee that is required to be paid for services charges related to purchasing the main product or service. Service fees are charged directly to the Customer. They are different from the tips offered to the service provider's employee.