In the step-down method,the first service department used in the sequence to allocate service department costs is the department that renders the ________ departments.
A)least service to the greatest number of other service departments
B)least service to the greatest number of producing departments
C)greatest service to the greatest number of other service departments
D)greatest service to the greatest number of producing departments

Question

Quizplus · Accepted Answer

The step-down method allocates service department costs to other service departments and then to producing departments. The first service department used in the sequence is the one that renders the greatest service to the greatest number of other service departments. This is because this department has the most impact on the costs of the other service departments, and therefore its costs should be allocated to them first.

In the Step-Down Method,the First Service Department Used in the Sequence