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...
Related questions
Question
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.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning