Method, which allocates cost of support department for operating departments by recognizing all mutual services provided is classified as

A. indirect method

B. direct method

C. step down method

D. reciprocal method

Answer: Option D

Solution(By Examveda Team)

Method, which allocates cost of support department for operating departments by recognizing all mutual services provided is classified as reciprocal method. In the reciprocal method, the relationship between the service departments is recognized. This means service department costs are allocated to and from the other service departments.