The step-down method allocates more total cost to operating departments than does the direct method.

Name: The step-down method allocates more total cost to operating departments than does the direct method.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The step-down method allocates costs to both service and operating departments, but it does not necessarily allocate more total cost to operating departments compared to the direct method. The total cost allocated remains the same; the difference lies in the allocation process.

The Step-Down Method Allocates More Total Cost to Operating Departments