Only Service departments
Only Production departments
Both Production and service departments
None of the production and service departments
Answer is Right!
Answer is Wrong!
The correct answer is C. Both Production and service departments.
Service departments provide services that support the production departments. These services can include things like maintenance, security, and human resources. The costs of service departments need to be allocated to production departments in order to accurately determine the cost of goods sold.
Option A is incorrect because service departments do not produce goods. Option B is incorrect because production departments do not receive any services from service departments. Option D is incorrect because both production and service departments need to be considered when allocating service department costs.