Which of the following is NOT a benefit of the costs of support departments being allocated to production departments?
A)The allocation assists producing departments' use of support departments at a more efficient level.
B)Allocation of support department costs encourages managers of production departments to monitor performance of the support department.
C)The allocation helps each department select the correct level of support service consumption.
D)Management will use the information to support out-sourcing all support services.

Question

Quizplus · Accepted Answer

Management using the allocation information to support outsourcing all support services is not a benefit of the costs of support departments being allocated to production departments. In fact, this could potentially harm the organization if valuable support services are outsourced to lower quality providers. The other options listed (A, B, and C) are all benefits of allocating support department costs to production departments.

Which of the Following Is NOT a Benefit of the Costs