The greatest virtue of the step-down method is _____.
A)its simplicity
B)the lack of understandability by managers
C)the recognition of reciprocal relationships between service departments
D)its ability to allocate production department costs to service departments

Question

Quizplus · Accepted Answer

The greatest virtue of the step-down method is the recognition of reciprocal relationships between service departments. This is because the step-down method allocates costs based on both the direct and indirect services provided by each department, taking into account the fact that service departments often provide services to one another. The other choices do not accurately describe the greatest virtue of the step-down method.

The Greatest Virtue of the Step-Down Method Is _____