The methods used to allocate costs of reciprocal support departments include ____________?
Correct answer: D. all of aboveHire An Accountant
- A. direct method
- B. step down
- C. reciprocal method
- D. all of aboveHire An Accountant
Explanation
Support-department costs may be allocated using the direct method, step-down method, or reciprocal method. Since all three are recognized allocation approaches, the combined option is correct.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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