Which is not true of the various methods of allocating service department costs?
A)Application of the reciprocal method in a complex corporation usually requires the use of a computer
B)The direct method is quick to compute,accurate,and has low information requirements
C)There are multiple sequence possibilities for the step-down method
D)The choice of method affects the optimal allocation of resources
E)All of the choices are true

Question

Quizplus · Accepted Answer

The statement that the direct method is accurate is not true. In fact, the direct method is known to produce less accurate results compared to the step-down and reciprocal methods. The direct method also has limitations in its ability to reflect the extent of interdepartmental services utilized.

Which Is Not True of the Various Methods of Allocating