Allocation of factory service department costs to the production departments is necessary to:
A) measure use of plant capacity.
B) make sure that machines are operating efficiently.
C) calculate cost per unit for purposes of external financial reporting.
D) control costs.

Question

Quizplus · Accepted Answer

Allocating factory service department costs to production departments is necessary to accurately calculate the cost per unit, which is essential for external financial reporting.

Allocation of Factory Service Department Costs to the Production Departments