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Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773

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BuyFindarrow_forward

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773
Textbook Problem
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(Appendix 4B) The method that assigns support department costs by giving partial recognition to support department interactions is known as

  1. a. the sequential method.
  2. b. the proportional method.
  3. c. the reciprocal method.
  4. d. the direct method.
  5. e. None of these.

To determine

Identify the method that does not fully account for the support department interactions.

Explanation

Sequential Method:

Sequential method recognizes that there is possible interaction between the support departments. However, it does not account for such interaction in full which makes it more accurate as compared to the direct method.

a.

Sequential method accounts for a partial support department interaction and gives sound results than direct method. Therefore, option a is the correct answer.

b.

Proportional method is not a method for allocation of cost...

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