The correct answer is: A. indirect method.
The indirect method is a cost allocation method that allocates the costs of support departments to only operating departments. This is done by first allocating the costs of the support departments to each other, and then allocating the costs of the support departments to the operating departments.
The direct method is a cost allocation method that allocates the costs of support departments directly to the operating departments. This is done by identifying the specific costs that are incurred by each support department and then allocating those costs to the operating departments that benefit from them.
The step-down method is a cost allocation method that allocates the costs of support departments to operating departments in a series of steps. In the first step, the costs of the support departments that provide services to all of the other support departments are allocated to those other support departments. In the second step, the costs of the support departments that provide services to some of the operating departments are allocated to those operating departments. This process continues until all of the costs of the support departments have been allocated to the operating departments.
The reciprocal method is a cost allocation method that takes into account the fact that support departments often provide services to each other. This method allocates the costs of support departments to operating departments by using a system of equations that takes into account the services that each support department provides to the other support departments and to the operating departments.
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