For performance evaluation purposes, the lump-sum amount of fixed service department costs charged to an operating department should usually be based on either the operating department's peak-period or long-run average needs.

Question

Quizplus · Accepted Answer

This statement is true. The fixed service department costs should be allocated based on the operating department's peak-period or long-run average needs to accurately reflect the resources they use from the service department.

For Performance Evaluation Purposes, the Lump-Sum Amount of Fixed Service