Asked by Julian Cintron on Jul 19, 2024

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Verified

For performance evaluation purposes, variable service department costs should be charged to operating departments in predetermined, lump-sum amounts.

Predetermined

Established in advance or determined beforehand.

Lump-Sum Amounts

Single payments made for a group of items or services rather than individual transactions.

  • Comprehend the basic concepts and strategies for the apportionment of costs from service sections to functional departments.
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Verified Answer

AE
Ajitha EbenezerJul 22, 2024
Final Answer :
False
Explanation :
Variable service department costs should be allocated to operating departments based on usage or other appropriate allocation bases, rather than predetermined lump-sum amounts. This provides a more accurate and fair distribution of costs based on the actual amount of resources used by each operating department.