The reciprocal method of allocating support costs is considered superior to other methods because:
A) It is the easiest method to implement
B) It spreads support costs among cost pools based on the current number of employees
C) It takes into account all of the reciprocity in consumption between various departments
D) It ignores administrative costs because they are assumed to be shared equally by all departments

Question

The reciprocal method of allocating support costs is considered superior to other methods because: 
A) It is the easiest method to implement
B) It spreads support costs among cost pools based on the current number of employees
C) It takes into account all of the reciprocity in consumption between various departments
D) It ignores administrative costs because they are assumed to be shared equally by all departments

Quizplus · Accepted Answer

The reciprocal method takes into account all of the reciprocity in consumption between various departments, which makes it more accurate than methods that ignore interdepartmental interactions.

The Reciprocal Method of Allocating Support Costs Is Considered Superior