From the perspective of a manager of a producing department, which of the following is a desired feature of a cost allocation received from a service department?
A)The amount of the allocation should be based solely on the usage of the service by the producing department and not a function of the usage of the service by other departments.
B)The budgeted cost should be allocated rather than actual service department costs.
C)The allocation should force the production manager to pay for fluctuating demands that the production manager is creating.
D)All of these answer choices are correct.

Question

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The Answer of From the perspective of a manager of a producing department, which of the following is a desired feature of a cost allocation received from a service department?
A)The amount of the allocation should be based solely on the usage of the service by the producing department and not a function of the usage of the service by other departments.
B)The budgeted cost should be allocated rather than actual service department costs.
C)The allocation should force the production manager to pay for fluctuating demands that the production manager is creating.
D)All of these answer choices are correct.

From the Perspective of a Manager of a Producing Department