Which one of the following statements is incorrect? A. The reciprocal method is rarely used in practice, since the computations are relatively complex. B. In the step method, any amount of the allocation base that is attributable to a service department whose cost has already been allocated, is ignored. C. Under the direct method, the amount of the allocation base attributable to the service and operating departments are used in the allocation. D. Sales have been a favourite allocation base for service department costs since it is simple, straightforward and easy to work with.
Which one of the following statements is incorrect? A. The reciprocal method is rarely used in practice, since the computations are relatively complex. B. In the step method, any amount of the allocation base that is attributable to a service department whose cost has already been allocated, is ignored. C. Under the direct method, the amount of the allocation base attributable to the service and operating departments are used in the allocation. D. Sales have been a favourite allocation base for service department costs since it is simple, straightforward and easy to work with.
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter4: Accounting For Factory Overhead
Section: Chapter Questions
Problem 16Q: When using the sequential distribution method of distributing service department costs, if a service...
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Question
Which one of the following statements is incorrect?
| A. |
The reciprocal method is rarely used in practice, since the computations are relatively complex. |
|
| B. |
In the step method, any amount of the allocation base that is attributable to a service department whose cost has already been allocated, is ignored. |
|
| C. |
Under the direct method, the amount of the allocation base attributable to the service and operating departments are used in the allocation. |
|
| D. |
Sales have been a favourite allocation base for service department costs since it is simple, straightforward and easy to work with. |
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