When would the direct method and the step-down method of service department cost

Question

When would the direct method and the step-down method of service department cost allocation result in identical allocations being made to the operating departments?

A. That can happen only if there's an equal amount of service departments and operating departments.
B. The only time is when all costs in the service departments are fixed costs.
C. That can happen if there is only one service department or, if the company has more than one service department, if all the costs in those departments are fixed costs.
D. The only time is when there is just one service department.

Explanation / Answer

D. The only time is when there is just one service department.

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