(Appendix 11A)What allocation method recognizes that service departments often provide each other with interdepartmental services,and it is therefore considered to be the most accurate method for allocating service department costs to operating departments?
A) The direct method.
B) The step-down method.
C) The reciprocal method.
D) The allocation by cost behaviour methoD.

Question

Quizplus · Accepted Answer

The reciprocal method recognizes the fact that service departments provide interdepartmental services to each other, making it the most accurate method for allocating service department costs to operating departments. It is also more complex compared to the other methods, which do not consider reciprocal services.

(Appendix 11A)What Allocation Method Recognizes That Service Departments Often Provide