The costs of services charged to a profit center on the basis of its use of those services are
A) operating expenses
B) noncontrollable charges
C) service department charges
D) activity charges

Question

Quizplus · Accepted Answer

Service department charges refer to the costs of services charged to a profit center on the basis of its use of those services. Operating expenses refer to the expenses incurred in the normal course of business operations, and noncontrollable charges are charges that cannot be controlled by the profit center, such as allocated corporate overhead. Activity charges are charges based on specific activities, rather than services provided by a department.

The Costs of Services Charged to a Profit Center on the Basis