Memorex Clinic Has Two Service Departments (Laboratory and Human Resources)

Multiple Choice

Memorex Clinic has two service departments (Laboratory and Human Resources) and three production departments (In-patient Treatment, Neurology, and After-Care) . The two service departments service each other, and studies have shown that Laboratory provides the greatest amount of service. Given the various cost allocation methods, which of the following choices correctly denotes whether Laboratory cost would be allocated to Human Resources?

A) Direct, Step-down, and Reciprocal.
B) Direct.
C) Direct, and Reciprocal.
D) Step-down.
E) Step-down and Reciprocal.