Which of the following is a basic guideline that should be followed when allocating support department costs?

Question

Quizplus · Accepted Answer

Budgeted costs should be used for allocating support department costs because they are more predictable than actual costs, which can fluctuate significantly from period to period. This provides a more reliable basis for determining the costs incurred by producing departments, which ultimately affects their pricing decisions and profitability. Allocating service department costs at the end of the period is generally preferred to minimize the risk of inaccurate forecasts and unforeseen expenses. Producing department costs must be allocated to ensure that all the costs associated with producing a product are accounted for in determining its overall cost.

Which of the Following Is a Basic Guideline That Should