Definition: Reciprocal method is a method of allocating service department costs to other departments that gives full recognition to interdepartmental services. Explanation: The reciprocal method gives full recognition to interdepartmental services. Under the step method, only partial recognition of interdepartmental services is possible. The
The master budget is a summary of company’s plans that sets specific targets for sales, production, distribution and financing activities. It generally culminates in a cash budget, abudgeted income statement, and a budgeted balance sheet.