Why would allocation of support department costs be important in-service businesses such as hospitals or universities?

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. Keep in mind that these scholarly references can be found in the Saudi Electronic Library by conducting an advanced search specific to scholarly references.

You are required to reply to at least two peer discussion question post answers to this weekly discussion question and/or your instructor’s response to your posting. These post replies need to be substantial and constructive in nature. They should add to the content of the post and evaluate/analyze that post answer. Normal course dialogue doesn’t fulfill these two peer replies but is expected throughout the course. Answering all course questions is also required.

Required

• 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.
• 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.