The _________________ of allocating costs will distribute the costs involved with overhead to the revenue-producing departments. These costs will be distributed to the individual revenue-generating departments based on a percentage of revenue or square footage.
A) direct method
B) step-down allocation method
C) double distribution method
D) simultaneous equations method

Question

Quizplus · Accepted Answer

The direct method of allocating costs directly assigns overhead costs to revenue-producing departments based on a specific allocation base, such as percentage of revenue or square footage, without allocating costs between support departments.

The _________________ of Allocating Costs Will Distribute the Costs Involved