The Allocation Method for Support Department Costs That Allocates Fixed

question 40

Multiple Choice

The allocation method for support department costs that allocates fixed and variable costs separately is:

• A) the reciprocal method
• B) the step-down method
• C) the dual rate method
• D) the direct method

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Definitions:

Wages Expense

The total amount of wages paid by a business to its employees for a specified period of time.

Accounts Receivable

Money owed to a business by its customers for goods or services provided on credit.

Generally Accepted Accounting Principles

A set of accounting standards and procedures adopted in the U.S. that guide how financial statements are prepared and reported.

Correcting Entries

Entries made in a journal to correct mistakes or inaccuracies found in the financial statements or ledgers after they have been posted.