Production service department definition
/What is a Production Service Department?
A production service department is a group within a factory that does not directly manufacture goods; instead, it provides services to other parts of the factory. These service-focused groups are essential to the operation of a factory, despite their indirect impact on the production of goods.
Accounting for a Production Service Department
The cost of these service groups is included in factory overhead, which is then charged to factory output.
Examples of a Production Service Department
Examples of a production service department are the maintenance, janitorial, and quality assurance groups.