Criteria for selecting allocation bases for service department allocations should not include
A)direct,traceable benefits from the service.
B)the extent of facilities provided.
C)the ease of making an allocation.
D)sales dollars generated during the period.

Question

Quizplus · Accepted Answer

Sales dollars generated during the period are not a relevant factor in selecting allocation bases for service department allocations. The allocation base should be chosen based on direct or traceable benefits from the service provided and the extent of facilities provided, as well as the ease of making an allocation that accurately reflects the relative use of the service by the producing departments.

Criteria for Selecting Allocation Bases for Service Department Allocations Should