For performance evaluation purposes, any variance over budgeted fixed costs in a service department should be the responsibility of the service department and should not be charged to the departments that use the service.

Question

Quizplus · Accepted Answer

Variance over budgeted fixed costs in a service department should be absorbed by the department itself as it is not directly related to the usage of services by other departments. Therefore, it should not be charged to other departments.

For Performance Evaluation Purposes, Any Variance Over Budgeted Fixed Costs