Under the reciprocal method, the total costs allocated out of the support departments exceed the total costs of the support departments before cost allocation began.

Question

Quizplus · Accepted Answer

This is because the reciprocal method takes into account the services received between support departments, resulting in some double counting of costs. As a result, the total costs allocated out may be higher than the total costs before allocation.

Under the Reciprocal Method, the Total Costs Allocated Out of the Support