How are support department costs accounted for?

Question

Quizplus · Accepted Answer

Support department costs are indirect costs and are not directly traceable to units of product. Therefore, they are usually allocated to producing departments based on some allocation scheme, such as the number of employees or machine hours used. Once the costs are allocated to the producing departments, they are then allocated to the units of product. Option B is the most common method used to allocate support department costs.

How Are Support Department Costs Accounted For