What is the third,or final,step in allocating service department costs to production departments?
A)Assign overhead costs that are directly attributable to a service or production department.
B)Allocate other overhead costs based on appropriate cost drivers.
C)Allocate service department costs to production departments.
D)None of the answers is correct.

Question

Quizplus · Accepted Answer

This step involves distributing the total costs of service departments to the production departments based on an appropriate allocation method (such as the reciprocal method or the step-down method). This final step ensures that all costs are ultimately attributed to the products or services being produced by the organization.

What Is the Third,or Final,step in Allocating Service Department Costs