Because this allocation method recognizes that service departments often provide each other with interdepartmental 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.

Question

Quizplus · Accepted Answer

The reciprocal method accounts for the mutual services provided among service departments, making it the most accurate method for allocating service department costs to production departments.

Because This Allocation Method Recognizes That Service Departments Often Provide