Piedmont Company has one service department and three operating departments.During a particular year,a substantial variance developed between the actual costs and the budgeted costs of the service department.For performance evaluation purposes,the variance should be:
A)allocated to the operating departments on the basis of usage.
B)allocated to operating departments,but on some basis other than usage.
C)kept in the service department,and not charged to the operating departments at all.
D)shared equitably among all departments.

Question

Quizplus · Accepted Answer

For performance evaluation, variances should be kept in the service department to accurately assess its performance without affecting the operating departments.

Piedmont Company Has One Service Department and Three Operating Departments