GAAP requires the allocation of joint costs but does not require the allocation of service department...

GAAP requires the allocation of joint costs but does not require the allocation of service department costs.

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True.

GAAP requires the allocation of joint costs but does not require the allocation of service department costs.

GAAP requires that the cost allocation methods used to allocate joint costs should be rational and systematic, resulting in an allocation of joint costs that is reasonable. There are three commonly used allocation methods for allocating joints costs: physical units method, relative direct cost method, and stand‐alone cost allocation method.

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