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Support Cost Allocation Using the Direct Method (Cost Accounting Tutorial #32)

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Published on Aug 13, 2014

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In this tutorial we'll use the direct method to allocate support department (service department) costs to revenue producing departments. The direct method completely ignores that support departments assist other support departments. This is the reason why we don't prorate the cost using any of the cost driver data from support departments. We'll cover the step-down and reciprocal method next.

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