For performance evaluation purposes, the actual fixed costs of a service department should be charged to the departments that consume the service in proportion to the actual services provided to the consuming departments during the period.

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Rachael Julaine · Accepted Answer

Final Answer : False, Explanation :  Fixed costs are typically allocated based on budgeted, rather than actual, service consumption to ensure stability and predictability in the allocation process.

For performance evaluation purposes, the actual fixed costs of a service department should be charged to the departments that consume the service in proportion to the actual services provided to the consuming departments during the period.

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