Q10.Consider the following statements about the step-down method of service depart- ment cost allocation:

1. Under the step-down method, all service department costs are eventually allocated to production departments.
2. The order in which service department costs are allocated is important.
3. After a service department's costs have been allocated to other departments, costs are re-circulated back to that service department.

Which of the above statements is (are) correct?

a.I only.

b.II only.

c.I and II

d.I and III

e.I, II, and III