The method that allocates costs by explicitly including all the services rendered among all support departments is the ________.
A) direct method
B) step-down method
C) reciprocal method
D) sequential method

Question

Quizplus · Accepted Answer

The reciprocal method allocates costs by including all services rendered between support departments, rather than just the services provided directly to the producing departments like the direct and step-down methods. Therefore, the reciprocal method is the most accurate when allocating support department costs.

The Method That Allocates Costs by Explicitly Including All the Services