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. That can happen only if there's an equal amount of service departments and operating departments. B. The only time is when all costs in the service departments are fixed costs. C. That can happen if there is only one service department or, if the company has more than one service department, if all the costs in those departments are fixed costs. D. The only time is when there is just one service department.
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. That can happen only if there's an equal amount of service departments and operating departments. B. The only time is when all costs in the service departments are fixed costs. C. That can happen if there is only one service department or, if the company has more than one service department, if all the costs in those departments are fixed costs. D. The only time is when there is just one service department.
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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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. That can happen only if there's an equal amount of service departments and operating departments.
B. The only time is when all costs in the service departments are fixed costs.
C. That can happen if there is only one service department or, if the company has more than one service department, if all the costs in those departments are fixed costs.
D. The only time is when there is just one service department.
A. That can happen only if there's an equal amount of service departments and operating departments.
B. The only time is when all costs in the service departments are fixed costs.
C. That can happen if there is only one service department or, if the company has more than one service department, if all the costs in those departments are fixed costs.
D. The only time is when there is just one service department.
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