Service Allocations Direct and Step Notes.docx - Service...

This preview shows page 1 - 2 out of 4 pages.

Service Allocations: Direct & Step Service Department Cost Allocation Foundation ____service_______ departments provide services to other subunits within center. Cost centers whose costs are not allocated to another cost center are called _user___ cost centers. Service and production departments can be intermediate costs centers. Service departments cannot be final costs centers. Why allocate service department costs? 1. 2. 3. What are the three methods for allocating service department costs? 1. 2. 3. Direct Method All costs allocated directly to the final user, or cost center. There are no intermediate cost centers. When allocating costs from service centers, the total cost is the direct cost plus the allocated cost.

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture