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True/False The selection of an allocation base in the direct method is easier than the selection of an allocation base in the step method. One
True/False The selection of an allocation base in the direct method is easier than the selection of an allocation base in the step method. One potential disadvantage of the reciprocal method is it could overstate the cost of running the organization's service departments. In deciding whether to outsource a service department or not, the cost of the service department should be estimated using the step method of allocation. Which of the following is the least practical reason for allocating service department costs of user departments? a. to ascertain profitability of user departments b. to evaluate performance of managers and divisions c. to make user departments aware that services are costly d. to provide the best possible service to users
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