The head of each service department is held responsible for the costs incurred in his or her service department. In traditional cost accounting each service department's costs are then allocated to the production departments. The service departments' costs become a production department's indirect factory overhead which is then allocated to the output of each production department.
The various methods of allocating service departments' costs are covered in cost accounting textbooks.
Learn Accounting: Gain unlimited access to our seminar videos, flashcards, visual tutorials, exams, business forms, and more when you upgrade to PRO.