Register now or log in to join your professional community.
1- the direct method
2- the step down method
3- the reciprocal method
service cost distrubtion
1- direct method
2 - step down method
3 - receprocal method
the better is receprocal
overhead cost
ACTIVITY BASED COST is the better to disribution overhead
· Both step-down method and reciprocal method belongs to the allocation metods which can be used to allocate support department costs to operating department.(Now, I wanna tell you the three allocation
· methods are direct method, step-down method and reciprocal method.)First of all, the step-down method allocates some (but not all) support department costs to other support departments. Secondly, the first support department's costs are allocated to all operating and support departments that use its services. Then, each subsequent support department's costs are allocated to all operating and support departments that use its services, except any support department whose costs were already allocated. What's more, allocation order must be determined.For reciprocal method, first and foremost, the reciprocal method allocates all support department costs to other support departments. Secondly, the first step is to compute the total costs of each support department when its usage of other support department services is taken into consideration. In addition, support department costs are then allocated to all other operating and support departments that consume its services.I hope my answer can help your work. If I have some grammar mistakes, please point out, first support department's costs are allocated to all operating and support departments that use its services. Then, each subsequent support department's costs are allocated to all operating and support departments that use its services, except any support department whose costs were already allocated. What's more, allocation order must be determined.For reciprocal method, first and foremost,the reciprocal method allocates all support department costs to other support departments. Secondly, the first step is to compute the total costs of each support department when its usage of other support department services is taken into consideration. In addition, support department costs are then allocated to all other operating and support departments that consume its services.
** i need worksheet to applying ABC method (one of th modern methods )
If I have some grammar mistakes, please point out,
· Thank you very much.
