Eastside Hospital has two service departments (Patient Records and Accounting) and two "production" departments (Internal Medicine and Surgery). It uses the reciprocal-services method of cost allocation and should allocate Internal Medicine cost to Surgery.

Question

Quizplus · Accepted Answer

The reciprocal-services method allocates service department costs to other service departments and production departments, but it does not allocate production department costs to other production departments.

Eastside Hospital Has Two Service Departments (Patient Records and Accounting)