(Appendix 4B)The step-down method of allocating service department costs takes into account some,but not all,of the reciprocal services that service departments provide to each other.

Question

Quizplus · Accepted Answer

The step-down method considers the services provided by service departments to production departments and to other service departments. However, it does not fully account for reciprocal services provided between service departments, leading to some degree of inaccuracy in cost allocation.

(Appendix 4B)The Step-Down Method of Allocating Service Department Costs Takes