Ideally, the base selected for charging a service department's costs to operating departments should be whatever drives those costs.

Question

Quizplus · Accepted Answer

The base selected for charging a service department's costs should be based on the activity or service provided by that department, which drives the costs. This is known as activity-based costing (ABC) and is considered a more accurate method of allocating costs than traditional methods. Therefore, the statement is true.

Ideally, the Base Selected for Charging a Service Department's Costs