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Step method

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1. Using the step method, allocate the service department costs to the operating department.
2. Assume that the company allocates service department costs by the direct method, rather than by the step method. Assuming that the company uses the direct method, how much overhead costs would be assigned to each operating department?

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Solution Summary

The solution allocates the service department costs using the step method and direct method.

Solution provided by:
  • BE, Bangalore University, India
  • MS, University of Wisconsin-Madison
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