For performance evaluation purposes, the fixed costs of a service department should be charged to operating departments using:
A. budgeted fixed costs and the actual level of activity for the period.
B. budgeted fixed costs and the peak-period or long-run average servicing capacity.
C. actual fixed costs and the budgeted level of activity for the period.
D. actual fixed costs and the peak-period or long-run average servicing capacity.
Answer: B
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