Because this allocation method recognizes that service departments often provide each other with inter-departmental service,it is theoretically considered to be the most accurate method for allocating service department costs to production departments.This method is: (CMA adapted)
A)direct method.
B)variable method.
C)linear method.
D)reciprocal method.
E)step-down method.

Question

Quizplus · Accepted Answer

The reciprocal method is the only method that recognizes the mutual service between service departments accurately by considering the interdepartmental services provided by all the service departments, including the services they provided each other. This method is regarded as the most accurate, but it is also the most complicated and time-consuming.

Because This Allocation Method Recognizes That Service Departments Often Provide