The method of distributing service department costs to production departments which makes no attempt to determine the extent to which one service department renders its services to another department is the:
A)Direct distribution method.
B)Sequential distribution method.
C)Service department distribution method.
D)Reciprocal method.

Question

Quizplus · Accepted Answer

The method described is the Direct distribution method. This method simply allocates service department costs directly to production departments without considering any reciprocal services provided between service departments themselves.

The Method of Distributing Service Department Costs to Production Departments