eost center varianees with allocations This is a eontinuation of problem 6 above. Now assume service department eost is allocated to the other two eost centers. The firm's policy is to base these alloeations on standard variable rates, applied to the aetual quantity of the service department's LLA.

al What, now, is the presumed flexible budget for eaeh of the eonsuming departments? Give the journal entries to reeord the alloeation. Then amend your table displaying price and quantity variances for eaeh eost eategory in eaeh department to refleet this alloeation.
b I Give an explanation for why the firm might want to hold the eonsuming departments responsible for the service quantity but not the service price variances. Does this imply the service center manager is not responsible for the quantity variance?
el What happens here if the firm' s policy is to allocate service department eost to the eonsuming departments at standard variable eost (i.e., using the standard variable rate and the standard quantity of the LIA's independent variabIe)?AppendixLO1