(Appendix)The direct method of allocating service department costs assigns indirect costs to products in two stages.In the first stage,production department costs are allocated to the service departments.

Question

Quizplus · Accepted Answer

The reciprocal method assigns indirect costs to products in two stages. In the first stage, the reciprocal cost of each service department is computed. In the second stage these reciprocal costs are used to allocate the service department costs to the production departments.

(Appendix)The Direct Method of Allocating Service Department Costs Assigns Indirect