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https://www.chegg.com/homework-help/questions-and-answers/p15-30-allocating-costs-support-departments-step-direct-methods-central-valley-company-pre-q7847461
Question: P15-30 Allocating Costs Of Support Departments; Step-down And Direct Methods. The Central Valley Company Has Prepared Department Overhead Budgets For Budgeted-volume Levels Before Allocations As Follows: Support Departments: Building And Grounds $45,000 Personnel 300 General Plant Administration 37,320 Cafeteria: Operating Loss 970 Storeroom 9,990 ...
https://www.dummies.com/business/accounting/the-step-down-allocation-method-in-cost-accounting/
When cost accounting, the step-down allocation method allows support departments to allocate costs to each other — and ultimately to the operating departments. To accomplish this, the support departments are ranked. The ranking is often based on the percentage of costs that a support department incurs to support other support departments.
https://courses.lumenlearning.com/sac-managacct/chapter/step-method-of-allocation/
Step Method of Allocation. The second method of allocating service department costs is the step method. This method allocates service costs to the operating departments and other service departments in a sequential process. The sequence of allocation generally starts with the service department that has incurred the greatest costs.
https://quizlet.com/25240318/3-allocating-support-costs-to-producing-departments-flash-cards/
Once support departments are reciprocated, remaining producing departments' allocation bases are left intact, just as they were shown at the outset. When cross-allocating between support departments and setting up algebraic formulas, first identify the department's own costs.
https://www.accountingformanagement.org/step-method-of-cost-allocation/
Unlike direct method, the step method (also known as step down method) allocates the cost of a service department to other service departments as well as to operating departments. The cost allocation under step method is a sequential process. It begins with the allocation of cost of the service department that provides the greatest amount of […]
https://ocw.mit.edu/courses/sloan-school-of-management/15-521-management-accounting-and-control-spring-2003/lecture-notes/web_class9.pdf
Methods of Allocating Costs - Overview 1. Review the three Method of Allocating Costs. - Direct Method - Step Down Method - Reciprocal Method 2. Discuss the strengths and weaknesses of each method 3. Winery Problem – platform for discussing Joint Cost Allocations 4. Review remaining cost allocation problems. 5. Summarize and Review.
https://courses.lumenlearning.com/tcc-managacct/chapter/direct-method-of-allocation/
The direct method allocates costs of each of the service departments to each operating department based on each department’s share of the allocation base. Services used by other service departments are ignored. This means the direct method does not recognize service performed by other service departments.
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