ACT 500 SEU Allocation of Support Department Costs Discussion

Chapter 5 in the textbook provides examples of allocation of support department costs in manufacturing settings for determining product costs. Why would allocation of support department costs be important in-service businesses, such as hospitals or universities?

Embed course material concepts, principles, and theories (which requires supporting citations) along with at least one scholarly, peer-reviewed reference supporting your answer.

ref:

• Chapter 5 in Managerial Accounting
• Fang, F. (2020, March). Sourcing and procurement cost allocation in multi‐division firms. Production & Operations Management, 29(3), 767-78.

• Chapter 5 PowerPoint slides SEU_ACT500_Module05_PPT_Ch05.pptx – Alternative Formats in Managerial Accounting
• Minjae, K., Jeong-Hoon, H., Iny, H., & Taesik, A. (2020). Distorted cost allocation: An encouragement or discouragement? Seoul Journal of Business, 26(2), 89–119.