Department Costs, Common Costs and Revenues
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- Department Costs, Common Costs and Revenuesaccounting-mcqs › cost-accounting-mcqs › department-costs-common-costs-and-revenues
- Published
- 9 May 2023
- Last updated
- 28 May 2026
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Which approach assigns the expenses of support departments exclusively to the operating departments?
Multiple choice question for Department Costs, Common Costs and Revenues. Select an option, then review the explanation below.
Explanation
The direct allocation method distributes support department costs solely to operating departments without assigning costs to other support departments. In contrast, the indirect method ignores inter-support department services, the step-down method allocates costs sequentially including some support department interactions, and the reciprocal method fully accounts for mutual services among support departments.
More Department Costs, Common Costs and Revenues MCQs
Practice related questions from the same subject.
- 1.Which of the following approaches are used to assign costs among reciprocal support departments?
- 2.In the incremental cost allocation approach, what is the term for the cost object user that holds the second position in the ranking sequence?
- 3.What is the name of the technique that distributes the expenses of support departments to both operating and other support departments?
- 4.Which cost allocation technique assigns support department expenses to operating departments by accounting for all mutual services exchanged among support departments?
- 5.In the incremental approach, the party assigned the highest priority in distributing shared costs is known as the ____________?