What is the final step for allocating service department costs to production departments?
A)Assign overhead costs that are directly attributable to a service or production department.
B)Allocate other overhead costs (that are not directly attributable to a service or production department)based on some cost driver.
C)Allocate service department costs to production departments
D)Service department costs cannot be allocated to production departments.

Question

Quizplus · Accepted Answer

Allocating the service department costs to production departments is the final step in the process of allocating overhead costs. This step involves apportioning the costs of the service departments among the production departments. Once the service department costs have been allocated, the total production cost of each department can be determined, which is necessary to calculate the total cost of products or services. The other options listed are steps in the process, but not the final step.

What Is the Final Step for Allocating Service Department Costs