Both step-down method and reciprocal method belongs to the
allocation metods which can be used to allocate support department
costs to opertating department.
(Now, I wanna tell you the three allocation methods are direct
method, step-down method and reciprocal method.)
First of all, the step-down method allocates some (but not all)
support department costs to other support departments. Secondly,
the first support department's costs are allocated to all operating
and support departments that use its services. Then, each
subsequent support department's costs are allocated to all
operating and support departments that use its services, except any
support department whose costs were already allocated. What's more,
allocation order must be determined.
For reciprocal method, first and foremost, the reciprocal method
allocates all support department costs to other support
departments. Secondly, the first step is to compute the total costs
of each support department when its usage of other support
department services is taken into consideration. In addition,
support department costs are then allocated to all other operating
and support departments that consume its services.
I hope my answer can help your work. If I have some grammar
mistakes, please point out, coz I am a Chinese adolescent. Thank
you very much.