in a service department, service is rendered for the benefit of other departments. in some instances, these services benefit other service departments as well as the producing departments. although a service department does not directly engage in production, its costs are part of factory overhead and are a cost of the product. service departments that are common to many organizations include maintenance, payroll, cost accounting, data processing, and food services. do not confuse service businesses with the concept of service departments. service businesses do not produce a tangible good as their output. within a service business, however, there are producing departments and service departments. in a large law firm, for example, there may be departments for tax, real estate, and probate work ; these are the producing departments - the departments that come into direct contact with the client. the library of the law firm would be an example of a service department.