Service department costs should be allocated to a user department because
A)they consume costs of the operating unit.
B)a user department uses the services of a service department.
C)they measure plant capacity.
D)they are the final costs of the product.

Question

Quizplus · Accepted Answer

Service department costs should be allocated to a user department because the user department utilizes the services provided by the service department, and thus, it is appropriate to allocate the costs to reflect the usage.

Service Department Costs Should Be Allocated to a User Department