Which of the following cost allocation methods allocates support department costs only to the producing departments?
A)The direct allocation method
B)The reciprocal allocation method
C)The proportional allocation method
D)The step allocation method

Question

Quizplus · Accepted Answer

The direct allocation method only allocates support department costs directly to the producing departments, without taking into account any interdepartmental services or support. The other three methods (reciprocal, proportional, and step allocation) allocate support department costs based on various factors such as interdepartmental services, usage, and hierarchy.

Which of the Following Cost Allocation Methods Allocates Support Department