Which one of the following statements is incorrect? A.The reciprocal method is rarely used in practice, since the computations are relatively complex. B.In the step method, any amount of the allocation base that is attributable to a service department whose cost has already been allocated, is ignored. C.Under the direct method, the amount of the allocation base attributable to the service and operating departments are used in the allocation. D.Sales have been a favourite allocation base for service department costs since it is simple, straightforward and easy to work with.

The following statement is Incorrect:: In the step method, any amount of the allocation base that is…

Answered: Which one of the following statements…

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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Which one of the following statements is incorrect?

	A.	The reciprocal method is rarely used in practice, since the computations are relatively complex.
	B.	In the step method, any amount of the allocation base that is attributable to a service department whose cost has already been allocated, is ignored.
	C.	Under the direct method, the amount of the allocation base attributable to the service and operating departments are used in the allocation.
	D.	Sales have been a favourite allocation base for service department costs since it is simple, straightforward and easy to work with.

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