1. How could the direct method be useful in making decisions?
2. After researching the reciprocal method, I am in complete agreement the reciprocal method being the most efficient cost allocation method. According to an accounting resource, the reciprocal method is a method of allocating service department costs to other organizational departments, which results in providing full recognition to interdepartmental services. Lastly, I also learned the reciprocal method allocates service department costs in both directions. Can someone add to this?
https://www.accountingformanagement.com/reciprocal_method.htm