What are the pros-cons of inter-service departmental charges

Reference no: EM133560292

Problem

We learned about joint cost and service department. In real world settings, joint costs can be "charged" among different department; however, is there a "point" charging service department costs onto another service department? For example, accounting department is charged by the IT service desk for using the IT services. If costs are an important input for setting product/services prices, why not just charge all service costs onto the revenue generating department?

What is your take on this issue? What are the pros/cons of inter-service departmental charges?

Reference no: EM133560292

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