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difference between step down and direct method

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January 3rd 2017 AN ACCA USER 280 Points

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Step-Down Method

Also called the sequential allocation method
Allocates support-department costs to other support departments and to operating departments in a sequential manner
Partially recognizes the mutual services provided among all support departments

Direct Method
Allocates support costs only to operating departments.
Direct method does not allocate support-department costs to other support departments.

February 19th 2017 AN ACCA USER 17,840 Points