Use the information below to answer the following question(s).The owner of Hi-Tech Fiberglass Fabricators Inc.is interested in using the reciprocal allocation method.The following data from operations were collected for analysis.Budgeted manufacturing overhead costs:
Service furnished:
By Plant Maintenance (budgeted labour hours)
By Data Processing (budgeted computer time)

-The step-down allocation method
A)typically begins with the support department that provides the highest percentage of its total services to other support departments.
B)recognizes the total amount of services that support departments provide to each other.
C)allocates complete reciprocated costs.
D)offers key input for outsourcing decisions.
E)allocates support department costs to production departments only.

Question

Use the information below to answer the following question(s).The owner of Hi-Tech Fiberglass Fabricators Inc.is interested in using the reciprocal allocation method.The following data from operations were collected for analysis.Budgeted manufacturing overhead costs:
  Service furnished:
By Plant Maintenance (budgeted labour hours)
  By Data Processing (budgeted computer time)
 
-The step-down allocation method
A)typically begins with the support department that provides the highest percentage of its total services to other support departments. 
B)recognizes the total amount of services that support departments provide to each other. 
C)allocates complete reciprocated costs. 
D)offers key input for outsourcing decisions. 
E)allocates support department costs to production departments only.

Quizplus · Accepted Answer

The step-down allocation method begins with the support department that provides the highest percentage of its total services to other support departments, allocating its costs to other departments before moving to the next department.

Use the Information Below to Answer the Following Question(s)