By What is the step down method?
All of its costs are allocated out — whether to an operating department or to another support department. After that, the support department with the second-highest percentage is allocated. Step by step, the costs for each support department are fully allocated.
What is step allocation method?
The step allocation method is an approach used to allocate the cost of the services provided by one service department to another service department. It also allocates its other costs to the operating departments.
Why step down method is better than direct method?
The step-down method is more accurate than the direct method, but less accurate than the reciprocal method. The reciprocal method is more accurate than the other two methods because it fully recognizes self services and reciprocal services between service departments.
How do you do the ladder method?
Subscribe to Our Newsletter
- Step 1: Before getting together as a group, present the task or problem to all members.
- Step 2: Form a core group of two members.
- Step 3: Add a third group member to the core group.
- Step 4: Repeat the same process by adding a fourth member, and so on, to the group.
What are the four steps in the cost allocation process?
There are four major steps to allocating expenses:
- Determine program services and supporting activities.
- Determine direct and indirect expenses.
- Determine proper allocation methods for indirect expenses.
- Apply allocation methods to indirect expenses.
What are the three methods of allocating overhead costs?
When Hewlett-Packard produces printers, the company has three possible methods that can be used to allocate overhead costs to products—plantwide allocation, department allocation, and activity-based allocation (called activity-based costing).
What is the LCM of 8 12?
24
Answer: LCM of 8 and 12 is 24. Explanation: The LCM of two non-zero integers, x(8) and y(12), is the smallest positive integer m(24) that is divisible by both x(8) and y(12) without any remainder.
What do the two letter Ds in ladder represent when they are used for the six stage assertiveness process?
A – Arrange a meeting with the other person to discuss the situation. D – Define the problem specifically. D – Describe your feelings so that the other person fully understands how you feel about the situation.
What are the three methods of cost allocation?
There are three methods commonly used to allocate support costs: (1) the direct method; (2) the sequential (or step) method; and (3) the reciprocal method.
Is the high low method reliable?
The high low method can be relatively accurate if the highest and lowest activity levels are representative of the overall cost behavior of the company. However, if the two extreme activity levels are systematically different, then the high low method will produce inaccurate results.