Which of the following is not a reason that costs of operating service departments are allocated to other departments?
A)Many departments consume the services provided by service departments and should be assigned a share of the costs associated with the services consumed.
B)Allocating service costs to other departments for services provided gives department managers incentives to control the use of support services.
C)External reporting regulations (for tax and financial reporting)require allocating manufacturing overhead to the units produced.
D)Many departments consume the services provided by service departments and should be charged an arbitrary share of the costs because the costs must be allocated to someone.

Question

Quizplus · Accepted Answer

Allocating costs arbitrarily is not a valid reason; costs should be allocated based on actual consumption or usage to ensure accurate cost management and accountability.

Which of the Following Is Not a Reason That Costs