Accounting True or False

1. In service department cost allocations, sales dollars should be used as an allocation base whenever possible.

2. For performance evaluation purposes, variable service department costs should be charged to operating departments in predetermined, lump-sum amounts.

3. For performance evaluation purposes, any variance over budgeted fixed costs in a service department should be the responsibility of the service department and should not be charged to the departments that use the service.

4.For performance evaluation purposes, the actual fixed costs of a service department should be charged to the departments that consume the service in proportion to the actual services provided to the consuming departments during the period.

5. Whenever possible, service department costs should be separated into fixed and variable costs and charged separately to operating departments