service departments budgeted costs actual costs charged operating departments quizlet

Why should a service departments budgeted costs rather than its actual costs be charged to operating departments quizlet?

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Why should a service department's budgeted costs rather than its actual costs be charged to operating department?

11-9 A service department's budgeted costs, rather than its actual costs, should be charged to operating departments. This prohibits a service department from passing on cost overruns to operating departments.

Why should a service department's budgeted costs rather than its actual costs be charged to operating departments quizlet?

The use of budgeted costs rather than actual cost rates for allocating variable costs of service departments protects the user departments from intervening price fluctuations and also often protects them from inefficiencies in the service departments.

Why should budgeted cost rates rather than actual cost rates be used for allocating the variable costs of service departments?

Each service department should have at least one variable and one fixed cost pool. When allocating costs of service departments, using budgeted cost rates rather than actual cost rates protects the using departments from price changes and inefficiencies in the service departments.

What is an operating department and how is it different from a support department?

Operating Departments - are the departments or divisions within an organization that manufacture goods or produce services for external customers or clients. Support Departments - provide services internal to the organization that support the operating departments.

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