Westside Hospital has two service departments (Patient Records and Accounting) and two "production" departments (Internal Medicine and Surgery). Which of the following allocations would not take place under the reciprocal-services method of cost allocation?

Question

Quizplus · Accepted Answer

In the reciprocal-services method, costs are allocated between all departments, including both service and production departments. Therefore, all of the options except E are valid allocations. However, allocation of Surgery cost to Accounting and allocation of Internal Medicine cost to Surgery both involve allocating costs between two production departments, which is not done under the reciprocal-services method.

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