viewed as a transfer price that is charged for services provided by service departments to operating. departments.[r]
(1)PowerPoint Authors:
Susan Coomer Galbreath, Ph.D., CPA Charles W Caldwell, D.B.A., CMA Jon A Booker, Ph.D., CPA, CIA Cynthia J Rooney, Ph.D., CPA
Copyright © 2014 by The McGraw-Hill Companies, Inc All rights reserved.
(2)Learning Objective 12-6
Charge operating
departments for services provided by service
(3)Service Department Charges
Operating Departments
Carry out central purposes of organization.
Service Departments
Do not directly engage in
(4)Department Costs
To encourage
operating departments to wisely use service department resources
To encourage
operating departments to wisely use service department resources
To provide operating departments with more complete cost
data for making decisions
To provide operating departments with more complete cost
data for making decisions
To help measure the profitability of
operating departments
To help measure the profitability of
operating departments
To create an incentive for service
departments to operate efficiently
To create an incentive for service
departments to operate efficiently
Service department costs are charged to
(5)$
Transfer Prices
Operating Departments Service
Departments
The service department charges considered in this appendix can be
viewed as a transfer price that is charged for services provided by service departments to operating
departments
The service department charges considered in this appendix can be
viewed as a transfer price that is charged for services provided by service departments to operating
(6)Charging Costs by Behavior
Whenever possible, variable and fixed
service department costs should be charged
(7)Variable service
department costs should be
charged to consuming departments according to whatever activity
causes the incurrence of the cost.