In establishing prices for its services,which of the following practices is the least appropriate for an Internal Service Fund?
A)price at less than cost
B)price at cost only
C)price at cost plus an amount for anticipated inflation of equipment costs
D)price at cost plus an amount for depreciation of equipment purchased with a transfer of cash from the General Fund

Question

Quizplus · Accepted Answer

Pricing at less than cost is not appropriate for an Internal Service Fund, as it would result in a loss and go against the fund's objective of recovering costs. The appropriate pricing methods would be B, pricing at cost only or C and D, pricing at cost plus an amount for anticipated inflation or depreciation of equipment, respectively.

In Establishing Prices for Its Services,which of the Following Practices