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A company has three service departments (A, B, and C) and two production departments (X and Y). The following costs are incurred by the service

A company has three service departments (A, B, and C) and two production departments (X and Y). The following costs are incurred by the service departments:

  • Department A: $20,000
  • Department B: $15,000
  • Department C: $10,000

Allocate the service department costs to the production departments using the direct method, step-down method, and reciprocal method. Compare the results obtained from each method.

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