When Would the Direct Method and the Step-Down Method of Service

question 8

Multiple Choice

When would the direct method and the step-down method of service department cost allocation result in identical allocations being made to the operating departments?

• A) when there is only one service department
• B) when all of the costs in the service departments are fixed costs
• C) when there is an equal amount of service departments and operating departments
• D) both A and B above

---

Definitions:

Urinate

The process of excreting urine from the bladder through the urethra to the outside of the body.

Respiratory Acidosis

A medical condition characterized by decreased blood pH due to the accumulation of carbon dioxide as a result of respiratory dysfunction.

Carbon Dioxide

A colorless, odorless gas produced by burning carbon and organic compounds and by respiration. It is naturally present in air and is absorbed by plants in photosynthesis.

Bicarbonate

A salt-containing the anion HCO3, involved in the buffering of pH levels in the blood and other fluids of the body.