The direct allocation method:
A)partially recognizes the services provided among support departments
B)is also referred to as the sequential method
C)is conceptually the most precise method
D)results in allocating only the support costs used by operating departments

Question

Quizplus · Accepted Answer

The direct allocation method involves allocating support costs directly to operating departments based on usage. Therefore, it only allocates the support costs used by the operating departments and does not partially recognize the services provided among support departments. While it may be referred to as the sequential method, it is not conceptually the most precise method as it does not recognize any interdepartmental interactions or shared services.

The Direct Allocation Method