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4-11  Operating departments are the units in   an organization within which the central purposes of  the organization are carried out; these departments usually generate revenue. By contrast,  service departments provide support or assistance to the operating departments. Examples of  service departments include laundry ser-vices in a hotel or hospital, internal auditing, airport  maintenance services (ground crews), cafeteria, personnel, cost accounting, and so on. 4- 12  Service department costs are allocated   to products and services in two stages. Service  department costs are first allocated to the operating departments. These allocated costs are then  included in the operating departments’ overhead rates, which are used to cost products and  services. 4-13  Interdepartmental services exist when-ever two service departments provide services to  each other. 4-14 
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