SDA Flashcards
1
Q
what are operating depts?
A
depts that produce goods that form the core business operations of a company
2
Q
what are service depts?
A
not directly involved with the manu process but support the operations dept with essential services
3
Q
what is the purpose of SDA?
A
to equitably allocate the costs of the service depts to the operating depts using an appropriate basis
4
Q
why do we allocate indirect costs?
A
- to evaluate performance
- to measure profitability
- to encourage mgmt to make wise use of the services provided by service depts
5
Q
what is a problem with the direct method?
A
it does not take into account any inter-service dept relationships
6
Q
what is a problem with the step method?
A
it does not take into account the fact that there may be more than one interservice dept usage of service depts
