The preferred guidelines for allocating service department costs to user departments include ________.
A)allocating variable-cost and fixed-cost pools separately
B)establishing details about cost allocation after providing services
C)using actual costs for allocation
D)none of the above

Question

Quizplus · Accepted Answer

Allocating variable-cost and fixed-cost pools separately allows for a more accurate allocation of costs based on the services used by each user department. It also helps to avoid over-allocation or under-allocation of costs. Establishing details about cost allocation after providing services or using actual costs for allocation may not provide as precise results as allocating variable-cost and fixed-cost pools separately.

The Preferred Guidelines for Allocating Service Department Costs to User