The _____ method recognizes that some service departments support the activities in the service departments as well as those in production departments.
A)direct
B)indirect
C)step-down
D)step-up

Question

Quizplus · Accepted Answer

The step-down method allocates service department costs to other departments in a sequential manner, recognizing that certain service departments support other service departments as well as the production departments. The direct method allocates all service department costs directly to production departments, without considering any interactions or support between service departments. The indirect method simply allocates all service department costs to the production departments. The step-up method is not a commonly used allocation method.

The _____ Method Recognizes That Some Service Departments Support the Activities