Answer
The three methods of allocating support department costs are:
a. Direct method: It allocates support department costs directly to operating departments without considering services between support departments.
b. Step-down method: This method allocates support department costs to other support departments and operating departments sequentially, acknowledging some mutual services among support departments.
c. Reciprocal method: It fully recognizes mutual services among all support departments when allocating their costs to operating departments.
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