Option C is incorrect when allocating service department costs to operating departments.
<u>Explanation:
</u>
Typically, fixed costs are not assigned to working departments; however, they have to be absorbed by the service. This statement is incorrect in the service dept. Cost to Operating dept.
The reciprocal method assigns the cost of services to operating departments and other departments. The reciprocal costs are identified and the costs are assigned to each other and to services offered by each service department.
For example, if Service Department A requires certain services of Service Department B, the cost allocation system would not include these services. Since these services are not delegated to other departments, some auditors assume that the direct approach is not right.
Answer:
The correct word for the blank space is: Financial.
Explanation:
Financial management within an organization is in charge of planning, organizing, and controlling the financial sources in a way that matches the company's needs with its objectives. It aims to generate profit for a business to make sure the Return Over Investment (<em>ROI</em>) of the firm is good enough.
Managers should run a business ethically because it is the right thing to do.
They should do things ethically just because they are afraid of punishments and repercussions. Instead, they should understand the importance and moral value of acting ethically because they will set an example and then the employees will be ethical as well.