In service department cost allocations, sales dollars should be used as an allocation base whenever possible.

Name: In service department cost allocations, sales dollars should be used as an allocation base whenever possible.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Sales dollars may not be the most appropriate allocation base for service department costs as they may not be directly related to service department activities. Other bases such as labor hours or machine hours may be more appropriate.

In Service Department Cost Allocations, Sales Dollars Should Be Used