the following methods of cost allocation is completed by taking the service flows to epartments only and determining each production department's share of that service? Choice Reciprocal method. Direct method. Step method. Cross-functional method. Indirect method.

the following methods of cost allocation is completed by taking the service flows to epartments only and determining each production department's share of that service? Choice Reciprocal method. Direct method. Step method. Cross-functional method. Indirect method.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyze overhead expense as it helps the company in determining how much a company must charge for its products and services so that they can generate profit. Overhead expenses depend upon the nature of the business operations.

Question

Which one of the following methods of cost allocation is completed by taking the service flows to
production departments only and determining each production department's share of that service?
Multiple Choice
Reciprocal method.
O Direct method.
Step method.
O Cross-functional method.
Indirect method.

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