ACCA · Question 12 · Cost accounting techniques
A drone manufacturing plant has two production departments (Assembly and Testing) and two service departments (Maintenance and IT). Maintenance provides 20% of its services to IT. IT provides 10% of its services to Maintenance.
Which method of overhead reapportionment fully recognizes this mutual service provision?
Answer options:
Direct method
Step-down method
Reciprocal (repeated distribution) method
Blanket overhead rate method
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