Definition of service department

responsibility center within a factory that performs a class of service distinct from operating departments of the factory. Examples are purchasing, building and ground personnel, and power departments. All of these activities are necessary parts of the manufacturing process and primarily supportive of production departments. service department costs must be allocated to production departments before factory overhead rates are determined.

section or department of retail store giving ancillary services to customers. Service departments accept merchandise returns and credit applications, approve checks, wrap merchandise, make service appointments, and so on.