The Support Department Cost Allocation Method That Recognises Some of the Reciprocal

question 84

Multiple Choice

The support department cost allocation method that recognises some of the reciprocal services between support departments is called the:

• A) step-down method.
• B) reciprocal method.
• C) dual cost allocation method.
• D) joint cost method.

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Definitions:

Net 30 Credit Policy

A payment term that allows the buyer 30 days to pay the invoice in full from the invoice date.

Monthly Interest Rate

The percentage of interest charged or earned on a principal amount on a monthly basis.

Variable Cost

A cost that changes in proportion to changes in the level of output or activity.

Accounts Receivable Balance

The accounts receivable balance represents the total amount of money owed to a company by its customers for goods or services rendered but not yet paid for.