Bài giảng Appendix 12B: Service Department Charges

Service Department ChargesAppendix 12BLearning Objective 12-6Charge operating departments for services provided by service departments.Service Department ChargesOperating DepartmentsCarry out central purposes of organization.Service DepartmentsDo not directly engage in operating activities. Reasons for Charging Service Department CostsTo encourage operating departments to wisely use service department resources.To provide operating departments with more complete cost data for making decisions.To help measure the profitability of operating departments.To create an incentive for service departments to operate efficiently.Service department costs are charged to operating departments for a variety of reasons including:$Transfer PricesOperatingDepartmentsServiceDepartmentsThe 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. Charging Costs by BehaviorWhenever possible,variable and fixedservice department costsshould be chargedseparately.Variable servicedepartment costs should becharged to consuming departmentsaccording to whatever activitycauses the incurrence of the cost.Charging Costs by BehaviorCharge fixed service department costs to consuming departments in predetermined lump-sum amounts that are based on the consuming department’s peak-period or long-run average servicing needs. Are based on amounts ofcapacity each consumingdepartment requires.Should not vary fromperiod to period.Charging Costs by BehaviorShould Actual or Budgeted Costs Be Charged?Budgeted variableand fixed service departmentcosts should be charged tooperating departments.Allocating fixed costs using a variableallocation base.Pitfalls in Allocating Fixed CostsUsing salesdollars as anallocation base.Pitfalls in Allocating Fixed CostsResultSales of one departmentinfluence the servicedepartment costsallocated to otherdepartments.End of Appendix 12B