What are four common methods used to allocate service department costs?
Direct method--assigns service department costs in a straight-forward manner to revenue producing areas.
Step method--ranks the quantity of services provided by each service department to other service areas.
Benefits-provided ranking--begins with the service department providing the most service to all other service areas and ends with the service department providing the least service to all other service areas.
Algebraic method--uses simultaneous equations that provide for reciprocal allocation of service costs among other service departments as well as revenue-producing departments. It is the most theoretically correct method.
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What will be an ideal response?
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Fill in the blanks with correct word