Prophit Clinic uses the step-down method to allocate service department costs to operating departments. The clinic has two service departments, Personnel and Information Technology (IT), and two operating departments, Family Medicine and Pediatrics. Data concerning those departments follow: Personnel costs are allocated first on the basis of employees and IT costs are allocated second on the basis of PCs. The total Pediatrics Department cost after allocations is closest to:
A)$231,638
B)$223,132
C)$232,286
D)$182,936

Question

Prophit Clinic uses the step-down method to allocate service department costs to operating departments. The clinic has two service departments, Personnel and Information Technology (IT), and two operating departments, Family Medicine and Pediatrics. Data concerning those departments follow:  Personnel costs are allocated first on the basis of employees and IT costs are allocated second on the basis of PCs. The total Pediatrics Department cost after allocations is closest to:
A)$231,638 
B)$223,132 
C)$232,286 
D)$182,936

Quizplus · Accepted Answer

The Answer of Prophit Clinic uses the step-down method to allocate service department costs to operating departments. The clinic has two service departments, Personnel and Information Technology (IT), and two operating departments, Family Medicine and Pediatrics. Data concerning those departments follow:  Personnel costs are allocated first on the basis of employees and IT costs are allocated second on the basis of PCs. The total Pediatrics Department cost after allocations is closest to:
A)$231,638 
B)$223,132 
C)$232,286 
D)$182,936

Prophit Clinic Uses the Step-Down Method to Allocate Service Department