The reciprocal method of cost allocation recognizes and allocates costs of all services provided by any support-service department, including those provided to other service departments.

Question

Quizplus · Accepted Answer

The reciprocal method of cost allocation fully accounts for the mutual services provided among all support-service departments, including the services exchanged between these departments, by solving a set of simultaneous equations to allocate costs accurately.

The Reciprocal Method of Cost Allocation Recognizes and Allocates Costs