Which service department cost allocation method provides for reciprocal allocation of service costs among the service department as well as to the revenue producing departments?
A)algebraic method
B)indirect method
C)step method
D)direct method

Question

Quizplus · Accepted Answer

The algebraic method allows for the reciprocal allocation of service costs among the service departments themselves in addition to allocating costs to the revenue-producing departments. This method acknowledges the interdependencies between service departments by solving simultaneous equations to allocate costs accurately.

Which Service Department Cost Allocation Method Provides for Reciprocal Allocation