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Cost Allocation Methods for Service Departments : A company allocates support department costs to production departments using the direct method, step-down method, and reciprocal allocation
Cost Allocation Methods for Service Departments: A company allocates support department costs to production departments using the direct method, step-down method, and reciprocal allocation method. Discuss the advantages and disadvantages of each cost allocation method in reflecting the true costs of services provided and promoting cost control and accountability. Analyze the implications of cost allocation methods for product costing, pricing decisions, and performance evaluation.
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