One cause to allocate provider dept fees to service department costs is to inspire the person departments to display their use of the provider departments. True.
The required details about service department costs is mentioned in below paragraph.
The fees of service department costs are allotted to the running departments due to the fact they exist to aid the running departments. Examples of service department costs are maintenance, administration, cafeterias, laundries, and receiving.There are 3 strategies for allocating provider branch fees: direct, sequential, and reciprocal. The first step of every technique is to categorise every organizational unit as both an running or provider branch. service department costs may be allotted primarily based totally on real prices or budgeted prices....
Companies that allocate service department costs achieve this for one or greater of the subsequent reasons:
To offer greater correct product fee information. ...
To enhance selections approximately aid utilization. ...
To ration constrained resources.
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