Under the sequential method of allocating support department costs to production departments using ABC, support department costs are allocated back to support departments from which costs have already been allocated.

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Under the sequential method, once support department costs are allocated to production departments (and possibly other support departments in a sequential manner), they are not allocated back to the support departments from which they were originally allocated. This method allocates costs in a one-way flow, avoiding the circular allocation back to the originating support departments.

Under the Sequential Method of Allocating Support Department Costs to Production