What would be the least acceptable criterion to be used in allocating service departments costs to production departments?

1. Cause and effect
2. Benefits received
3. Ability to bear costs

Is it likely that one service department provides service to other service departments?

1. Yes
2. No

The allocated service departments costs are included in which of the following manufacturing costs of the production departments who receive support service?

1. Direct materials
2. Direct labor
3. Manufacturing overhead

The concept of allocation of service departments costs to non-service departments is equally applicable to service companies and merchandising companies.

1. True
2. False