What are some methods used to allocate support costs?

Support costs can be allocated using several methods, including direct allocation, where costs are assigned directly to departments based on their usage, and activity-based costing, which assigns costs based on actual activities that drive overhead. Another common method is the step-down approach, where support costs are allocated sequentially to departments based on a predetermined hierarchy. Finally, the reciprocal method considers the mutual services provided among departments, allowing for a more accurate allocation of shared costs.