The step-down method allocates less total cost to operating departments than does the direct method.

Name: The step-down method allocates less total cost to operating departments than does the direct method.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The step-down method allocates costs to both service and operating departments, potentially resulting in more total costs being allocated to operating departments compared to the direct method, which only allocates costs directly to operating departments.

The Step-Down Method Allocates Less Total Cost to Operating Departments