Which of the following allocation methods does not recognize any services that support departments provide to each other?
Support Department Cost Allocation Learning Objectives Show
2. ASSIGNING DEPARTMENT COSTS TO PRODUCING DEPARTMENTS
3. CHOOSING A SUPPORT DEPARTMENT COST ALLOCATION METHOD
4. DEPARTMENTAL OVERHEAD RATES AND PRODUCT COSTING
The flow of costs could be diagramed as follows:
Which of the following methods of support department cost allocation recognizes all the interaction among the support departments?The sequential (or step) method of allocation recognizes that interactions among support departments do occur.
What are the 3 allocation methods?There are three methods for allocating service department costs: direct, sequential, and reciprocal. The first step of each method is to classify each organizational unit as either an operating or service department.
What methods can managers use to allocate costs of multiple support departments to operating departments?There are three methods of allocating support department costs: the direct, step-down and reciprocal. The key differences among the methods are the assumptions as to how services provided by one support department are allocated to other support departments.
Which of the following is one of the methods of allocating support department costs to operating departments?The direct method allocates costs of each of the service departments to each operating department based on each department's share of the allocation base.
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