Asked by Keilan Harris on May 22, 2024
Verified
Variable service department costs should be charged to operating departments at the end of the period according to the formula:
A) Budgeted rate × Budgeted activity.
B) Budgeted rate × Actual activity.
C) Actual rate × Actual activity.
D) Budgeted total cost × Percentage of peak-period capacity required.
Variable Service Department Costs
Expenses in a service department that fluctuate in direct proportion to changes in the level of service activity or volume.
Budgeted Rate
A predetermined rate, often used for allocating costs or resources in a budget based on estimated expenditures.
Actual Activity
The real, measured amount of work performed or the level of production achieved over a specified period of time.
- Assess and dissect the impact of verifiable versus estimated costs and undertakings on departmental charges.
- Evaluate the role of service departments within a company and how their costs are allocated to operating departments.
Verified Answer
Learning Objectives
- Assess and dissect the impact of verifiable versus estimated costs and undertakings on departmental charges.
- Evaluate the role of service departments within a company and how their costs are allocated to operating departments.
Related questions
Mangiamele Corporation's Maintenance Department Provides Services to the Company's Two ...
The Medical Services Department of Fischer Company Budgeted $31 of ...
Oaks Company Maintains a Cafeteria for Its Employees ...
The Medical Services Department of Fischer Company Budgeted $25 of ...
For Performance Evaluation Purposes, Variable Service Department Costs Should Be ...