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Question 1: Which of the following statements about reciprocal service department costs is correct?
Multiple Choice
Option 1: They are not allocated to producing departments under either the direct or the step-down methods.
Option 2: They are allocated to producing departments under the step-down method but not allocated to producing departments at all under the direct method.
Option 3: They are allocated to producing departments under the direct method but not allocated to producing departments at all under the step-down method.
Option 4: They are allocated to producing departments under both the direct and step-down methods.
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Compute price and usage variances for materials. Compute the labor rate and labor efficiency variances. Compute the fixed overhead spending and volume variances.
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