The Step Method Allocates Some, but Not All, Service Department

question 37

True/False

The step method allocates some, but not all, service department costs to other service departments.

---

Definitions:

Continuous Process

A manufacturing process where production runs 24/7, often used in industries like chemicals and oil refining.

Equivalent Units

A concept used in cost accounting to convert partially completed goods into a number of completed units for inventory valuation.

Production Department

The division within a business that is charged with the manufacture of goods or the provision of services.

Materials Consumed

The direct raw materials used in the production process during a specific period.