The step-down method of service department cost allocation ignores interdepartmental services provided from one service department to another service department and allocates all service department costs directly to operating departments.

Question

Quizplus · Accepted Answer

The step-down method does not ignore interdepartmental services, but rather allocates them based on a sequential distribution of costs, taking into account services rendered both within and between service departments.

The Step-Down Method of Service Department Cost Allocation Ignores Interdepartmental