Asked by Julian Cintron on Jul 19, 2024
Verified
For performance evaluation purposes, variable service department costs should be charged to operating departments in predetermined, lump-sum amounts.
Lump-Sum Amounts
Single payments made for a group of items or services rather than individual transactions.
Predetermined
Established in advance or determined beforehand.
- Comprehend the basic concepts and strategies for the apportionment of costs from service sections to functional departments.
Verified Answer
AE
Ajitha EbenezerJul 22, 2024
Final Answer :
False
Explanation :
Variable service department costs should be allocated to operating departments based on usage or other appropriate allocation bases, rather than predetermined lump-sum amounts. This provides a more accurate and fair distribution of costs based on the actual amount of resources used by each operating department.
Learning Objectives
- Comprehend the basic concepts and strategies for the apportionment of costs from service sections to functional departments.
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