To discourage excessive use of a support department, management might
A)not allocate any costs of the support departments.
B)allocate costs based on user department usage.
C)allocate a fixed amount to each department regardless of use.
D)expense fixed costs of support departments directly to the income statement.
E)create special accounting records for the support department.

Question

Quizplus · Accepted Answer

Allocating costs based on user department usage incentivizes them to use the support department resources only when necessary and discourages excessive use. Not allocating any costs or allocating a fixed amount regardless of use can lead to unfair allocation of costs and inefficiencies. Expense fixed costs of support departments directly to the income statement can distort the profitability of user departments. Creating special accounting records for the support department can help in tracking their costs, but it does not directly discourage excessive use.

To Discourage Excessive Use of a Support Department, Management Might