The Method of Distributing Service Department Costs to Production Departments

question 81

Multiple Choice

The method of distributing service department costs to production departments which distributes service department costs regressively to other service departments,and then to production departments is the:

• A)Direct distribution method.
• B)Sequential distribution method.
• C)Service department distribution method.
• D)Reciprocal method.

---

Definitions:

Marginal Resource Cost

The additional cost incurred by a firm for using one more unit of input, like labor or raw materials.

Labor

The effort by workers to produce goods or services, typically measured in terms of hours worked or output produced.

Additional Unit

Refers to the next unit of a product or service to be produced or consumed, considered in analysis of costs and benefits.

Competitive Employer

An employer who maintains a strong position within the labor market by offering compelling wages, benefits, or working conditions to attract and retain employees.