Use the following information for the next 2 questions.
Cope, Inc. has the following costs and usage data for its support departments:
-If the step-down method is used, and the order of allocation is department B first, then A, and finally C, the amount of support department A costs allocated to operating department 2 will be
A) $15,000
B) $23,250
C) $24,000
D) $18,600

Question

Use the following information for the next 2 questions.
Cope, Inc. has the following costs and usage data for its support departments: 
-If the step-down method is used, and the order of allocation is department B first, then A, and finally C, the amount of support department A costs allocated to operating department 2 will be
A) $15,000 
B) $23,250 
C) $24,000 
D) $18,600

Quizplus · Accepted Answer

In the step-down method, support department costs are allocated in a sequential order. Since department B is allocated first, its costs are distributed to A and C before A's costs are allocated. After B's allocation, A's costs are allocated to the operating departments, including department 2. The calculation results in $23,250 being allocated to operating department 2 from department A.

Use the Following Information for the Next 2 Questions