Which of the Following Cost Allocation Methods Allocates Support Department

question 34

Multiple Choice

Which of the following cost allocation methods allocates support department costs only to the producing departments?

• A)The direct allocation method
• B)The reciprocal allocation method
• C)The proportional allocation method
• D)The step allocation method

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Definitions:

Multiple-Step

A detailed income statement format that separates operational revenue and expenses from non-operational ones to highlight core business profitability.

Statement Of Income

A statement of income is a financial document that summarizes a company's revenues, expenses, and profits or losses over a specific time period.

Freight In

The cost associated with transporting goods into a business, included as part of the inventory cost.

Purchases Account

An account used in accounting to track all purchases of goods and materials that a business intends to resell.