Since service departments do not generate revenues, it is unnecessary to accumulate and allocate their costs.

Question

Quizplus · Accepted Answer

While service departments do not generate revenues directly, they do incur costs and it is important to allocate those costs appropriately to the departments that benefit from the services provided. This allows for a more accurate determination of the costs of producing goods or services and helps in making informed business decisions.

Since Service Departments Do Not Generate Revenues, It Is Unnecessary