The reciprocal approach to allocating support department costs recognises that only large support departments provide services to other support departments.

Reciprocal Approach

A method used in managerial accounting to allocate costs among departments or units when there are mutual services provided between them.

Support Department Costs

Costs incurred by departments that do not directly produce goods or services but provide support to other departments that do.

Large Support Departments

Essential organizational units that provide services and support to the core functions of a business but do not directly contribute to profit generation.