Which of the following companies is following a policy with respect to the costs

Question

Which of the following companies is following a policy with respect to the costs of service departments that is not recommended?
a.To charge operating departments with the depreciation of forklifts used at its central warehouse, Shalimar Electronics charges predetermined lump-sum amounts calculated on the basis of the long-term average use of the services provided by the warehouse to the various segments.
b. Manhattan Electronics uses the sales revenue of its various divisions to allocate costs connected with the upkeep of its headquarters building.
c. Rainier Industrial does not allow its service departments to pass on the costs of their inefficiencies to the operating departments.
d. Golkonda Refinery separately allocates fixed and variable costs incurred by its service departments to its operating departments.
explain please

Explanation / Answer

Originally, I wasn't going to answer this because I'm not really 100% sure, but I'm pretty confident that the answer is B. The costs associated with the upkeep of the headquarters building are not affected by the performance of the various divisions (assuming they're in different buildings). I.E. if one division does particularly well during the month of May, that does not mean the cost of upkeep for the headquater building will increase/decrease. Furthermore, all of the other practices seem to be things I would recommend.

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