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Support costs can be allocated using several methods, including direct allocation, where costs are assigned directly to departments based on their usage, and activity-based costing, which assigns costs based on actual activities that drive overhead. Another common method is the step-down approach, where support costs are allocated sequentially to departments based on a predetermined hierarchy. Finally, the reciprocal method considers the mutual services provided among departments, allowing for a more accurate allocation of shared costs.
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Step down method and reciprocal method?
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.
Is miscellaneous expense a fixed costs?
Miscellaneous expenses are generally considered variable costs rather than fixed costs, as they can fluctuate based on business activities and operational needs. Fixed costs remain constant regardless of production levels, such as rent or salaries. However, some businesses might allocate a portion of their miscellaneous expenses as fixed if they consistently incur similar amounts over time. Ultimately, the classification can depend on the specific context and nature of the expenses.
Are all direct cost are variable?
Yes generally direct costs are variable costs but there may be some direct costs which can be fixed costs as well.
Why are some budgeted costs based on actual costs from the previous years?
Some budgeted costs are based on actual costs of the previous year, information from supervisors about where resources might be more efficiently used, and subjective judgments about how much should be allowed for resources.
Why activity based costing?
Activity based costing allocate the overhead expenses based on activities performed and that's why it is an accurate way to allocate overhead expenses while in absorption costing, overheads are allocated based on some ratios or predetermined rate which is not accurate method of allocation of cost.
Step down method and reciprocal method?
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.
What are some antonyms for the word allocate?
Keep and keep together are antonyms of allocate.
What is the step down allocation method?
The step down allocation method is a way of distributing indirect costs to different departments or cost centers within an organization. It involves sequentially allocating service department costs to production departments based on a predetermined basis, such as usage or direct labor hours. This method recognizes that service departments also provide support to one another, allowing for a more accurate representation of total costs. However, it does not fully allocate all service department costs to each other, which can lead to some costs remaining unallocated.
Allocate in a sentence?
Here are some examples of allocate Is the superintendent allocating the funds for the music program? I allocated my money for my dog and bike collection. I'm allocating your paycheck!!!!! Are you going to allocate that? as you can see there are many ways to use allocate in a sentence
Who and who should you pay your tithe to?
You should pay your tithe to your local church or religious organization, as they typically use these funds to support their ministries, community services, and operational costs. Some may also choose to allocate a portion of their tithe to charitable organizations or missions that align with their beliefs. Ultimately, the decision may vary based on personal convictions and the guidance of your faith community.
How are tables internally represented in a database?
It depends on the database implementation. Some use individual files to represent each table, others allocate blocks of storage and use proprietary storage methods that include concepts such as linked lists and the like.
What are some examples of economic costs associated with implementing new technology in a business?
Some examples of economic costs associated with implementing new technology in a business include purchasing the technology itself, training employees to use it, potential downtime during implementation, and ongoing maintenance and support costs.
Is miscellaneous expense a fixed costs?
Miscellaneous expenses are generally considered variable costs rather than fixed costs, as they can fluctuate based on business activities and operational needs. Fixed costs remain constant regardless of production levels, such as rent or salaries. However, some businesses might allocate a portion of their miscellaneous expenses as fixed if they consistently incur similar amounts over time. Ultimately, the classification can depend on the specific context and nature of the expenses.
What are some effective DIY home insulation methods that can help improve energy efficiency and reduce heating costs?
Some effective DIY home insulation methods to improve energy efficiency and reduce heating costs include sealing gaps and cracks around windows and doors, adding weatherstripping, installing insulation in the attic and walls, using thermal curtains, and insulating hot water pipes.
Definition of a predetermined overhead rate?
Predetermined overhead rate is that overhead rate calculated before start of production to allocate overhead costs to units of products by using some ratio in relation to some other cost like material cost or labor cost or labor hours etc.
What are some alternative methods for installing floating shelves without drilling into the wall?
Some alternative methods for installing floating shelves without drilling into the wall include using adhesive strips, brackets that clamp onto the shelf, or using tension rods for support.
How to allocate a hard drive?
Go to http://www.ehow.com/how_6026_format-hard-drive.html to get some hints.
