Which of the Following Methods Allocates Support Department Costs

question 66

Multiple Choice

Which of the following methods allocates support department costs?

• A) direct allocation method
• B) reciprocal allocation method
• C) sequential allocation method
• D) all of these

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Definitions:

Compounded Annually

A method of calculating interest where the interest earned each year is added to the principal, and in the next year, interest is earned on the new principal sum.

Lump Sum

A singular transaction carried out at a specific point in time, as opposed to a sequence of smaller installments.

Savings

Money set aside for future use, often accumulating interest in a financial institution.

Rate of Return

The profit or deficit generated from an investment over an indicated time frame, shown as a ratio of the investment's initial cost.