Grant Company Has Several Service Departments That Provide Services to Each

question 129

Multiple Choice

Grant Company has several service departments that provide services to each other as well as to operating departments within the company.Which method would be least accurate in allocating the company's service department costs?

• A) The sequential method.
• B) The direct method.
• C) The step-down method.
• D) The reciprocal method.

---

Definitions:

Total Deductions

Total deductions refer to the sum of all amounts subtracted from an individual’s gross income or earnings, which can include taxes, social security contributions, and retirement plan contributions.

FICA-OASDI

Refers to part of the U.S. payroll tax that funds the Social Security program, standing for Federal Insurance Contributions Act - Old Age, Survivors, and Disability Insurance.

FICA-Medicare

The portion of the Federal Insurance Contributions Act (FICA) tax that is dedicated to Medicare, funding hospital insurance for individuals under the Medicare program.

FUTA Payable

The amount owed by an employer for the Federal Unemployment Tax Act to fund state workforce agencies and unemployment compensation for workers who have lost their jobs.