Which of the following statements about cost allocation is most correct?

a. The direct method of allocation recognizes services provided by support departments to one another.
b. A cost driver is any grouping of overhead costs that must be allocated.
c. The reciprocal method of allocation represents a compromise between the direct method and the step-down method.
d. A cost pool is the total amount of direct costs incurred by one of the patient service departments.
e. None of the above statements are correct.

Ans: e. None of the above statements are correct.