Which of the following allocations would not occur when the direct method is used in a manufacturing company?
A)Personnel department costs are allocated to the maintenance department.
B)Maintenance department costs are allocated to the mixing department.
C)Security department costs are allocated to the packaging department.
D)Payroll department costs are allocated to the assembly department.

Question

Quizplus · Accepted Answer

The direct method only allocates costs that can be directly traced to a specific department or product. Personnel department costs cannot be directly traced to the maintenance department, therefore it would not be allocated in the direct method.

Which of the Following Allocations Would Not Occur When the Direct