Which of the following statements is true about the step-down method?
A) it partially recognizes the services provided among support departments
B) it does not recognize the total services that support departments provide to each other
C) it is conceptually the most precise method
D) it results in allocating only the support costs used by operating departments

Question

Quizplus · Accepted Answer

The step-down method recognizes the services provided among support departments, but it does so only partially. It does not recognize the total services that support departments provide to each other, making it less precise than the reciprocal or dual methods. Additionally, it results in allocating both the support costs used by operating departments and the costs used within support departments themselves.

Which of the Following Statements Is True About the Step-Down