Cornerstones of Cost Management 2nd Edition by Don Hansen ,Maryanne Mowen

Exercise 40

Which of the following statements is true? a. The direct method of service department cost allocation takes no account of service department reciprocity.
B) If there is service department reciprocity, the best method to use is a single charging rate.
C) A plantwide overhead rate is used to account for service department reciprocity.
D) The best method of service department cost allocation is the one that minimizes total overhead costs.