Method, which allocates cost of support department to operating and support departments is known as

A. indirect method

B. direct method

C. step down method

D. reciprocal method

Answer: Option C

Solution(By Examveda Team)

Method, which allocates cost of support department to operating and support departments is known as step down method. The step method (also known as step down method) allocates the cost of a service department to other service departments as well as to operating departments. The cost allocation under step method is a sequential process.