Tuesday, October 20, 2009

What is a support department?

In a large corporation, a support department, which can also called a service department, usually provides the services that assist other internal departments operate the company. Some common examples of support departments are information technology, landscaping, maintenance, and parking services.

When allocating the costs of a support department to operating departments or divisions managers should consider these ideas:

  1. Should accounting fixed costs of support departments be allocated to specific operating divisions?
  2. When fixed costs are allocated, should variable and fixed costs be allocated in the same way?

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