There are several methods for allocating service department costs to production departments.The method which recognizes service provided by one service department to another but does not recognize reciprocal interdepartmental service is called: (CMA adapted)
A)direct method.
B)variable method.
C)linear method.
D)reciprocal methoD.
E)step-down method.

Question

Quizplus · Accepted Answer

The method described in the question, which recognizes service provided by one service department to another but does not recognize reciprocal interdepartmental service, is the step-down method. This method recognizes a partial degree of reciprocal service, but not the full extent of service that occurs in reciprocal relationships between service departments. Therefore, the best choice for this scenario is the step-down method, which allocates costs in a way that partially recognizes the service provided by one department to another without fully recognizing reciprocal relationships.

There Are Several Methods for Allocating Service Department Costs to Production