The direct method of departmental cost allocation is the simplest of the three methods because it:
A)Ignores the reciprocal flows.
B)Uses the service flows only to service departments.
C)Uses a sequence of steps to allocate service department costs.
D)All of the above.

Question

Quizplus · Accepted Answer

The direct method ignores all reciprocal flows and only allocates service department costs directly to the production departments. This makes it the simplest and easiest method to use, but it can potentially lead to inaccuracies in cost allocation.

The Direct Method of Departmental Cost Allocation Is the Simplest