Measuring and Assigning Support Department Costs
What are support departments, and why are their costs allocated to other departments?
• Q2: What process is used to allocate support department costs?
• Q3: How is the direct method used to allocate support costs to operating departments?
• Q4: How is the step-down method used to allocate support costs to operating departments?
• Q5: How is the reciprocal method used to allocate support costs to operating departments?
• Q6: What is the difference between single- and dual-rate allocations?
• Q7: How do support cost allocations affect decisions and managerial incentives?
