Which department is responsible for directly contributing value to a product or service?

Multiple choice question for Department Costs, Common Costs and Revenues. Select an option, then review the explanation below.

Explanation

The production (manufacturing) and operating departments are the ones that directly add value to the product or service, whereas allocation base departments support these functions indirectly.

Practice related questions from the same subject.

1.Which of the following approaches are used to assign costs among reciprocal support departments?
2.In the incremental cost allocation approach, what is the term for the cost object user that holds the second position in the ranking sequence?
3.What is the name of the technique that distributes the expenses of support departments to both operating and other support departments?
4.Which cost allocation technique assigns support department expenses to operating departments by accounting for all mutual services exchanged among support departments?
5.In the incremental approach, the party assigned the highest priority in distributing shared costs is known as the ____________?

Which department is responsible for directly contributing value to a product or service?

Explanation

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