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the ABC company is using the step-down method to allocate its support department (A,B &C) costs to production departments (

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Answer #1

The percentage of C's cost that should be allocated to B is Nil

In step down method cost of service department is allocated on sequential basis. First allocation is done for Department A and then for Department B and then Department C. When one service department cost is allocated there is no cost allocation for that department again in step down method.

Accordingly in the given case since Department A and B cost is allocated. Department C cost is not allocated to service department again. It is allocated to Production department only

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