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Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094

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BuyFindarrow_forward

Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

Service department charges and activity bases

 For each of the following service departments, identify an activity base that could be used for charging the expense to the profit center:

 a.    Legal

 b.    Duplication services

 c.    Information Technology Help Desk

 d.    Central purchasing

 e.    Networking

 f.    Accounts receivable

To determine

Service department charges: These are the indirect expenses incurred by profit center. These are charged for the services received by the department or division, based on the activity base of the service department.

To identify: The activity base of the given service department

Explanation

The following activity bases are identified for the service departments:

S. No Service Department Activity Base
a. Legal Number of hours of legal service
b. Duplication services Number of pages copied
c...

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