In a manufacturing company,service department costs are:
A) reported as selling and administrative expenses.
B) allocated to the products made by the company.
C) treated as direct costs.
D) expensed when incurred.

Question

Quizplus · Accepted Answer

Service department costs are indirect costs that cannot be traced directly to a product. Instead, they are allocated to the products made by the company using a predetermined rate. This helps to accurately assign overhead costs to each product and determine its true cost.

In a Manufacturing Company,service Department Costs Are