Use the following information to answer the following Questions
The Dahle Manufacturing Company has two production departments (Assembly and Finishing) and two service departments (Human Resources and Janitorial). The projected usage of the two service departments is as follows:

The budgeted costs in the service departments are: Human Resources, $90,000 and Janitorial, $50,000.

-Using the step-down method and assuming the Human Resources Department is allocated first, the amount of Human Resources cost allocated to the Assembly Department is:
A) $21,053.
B) $28,947.
C) $54,000.
D) $60,000.
E) $78,842.

Question

Use the following information to answer the following Questions
The Dahle Manufacturing Company has two production departments (Assembly and Finishing) and two service departments (Human Resources and Janitorial). The projected usage of the two service departments is as follows:

The budgeted costs in the service departments are: Human Resources, $90,000 and Janitorial, $50,000.

-Using the step-down method and assuming the Human Resources Department is allocated first, the amount of Human Resources cost allocated to the Assembly Department is:
A) $21,053. 
B) $28,947. 
C) $54,000. 
D) $60,000. 
E) $78,842.

Quizplus · Accepted Answer

The step-down method of cost allocation involves allocating the costs of service departments to other service departments and production departments based on a predetermined sequence. Assuming the Human Resources Department is allocated first, its entire cost would be distributed among the remaining departments based on relevant allocation bases (e.g., number of employees). Without specific numbers, it's not possible to calculate the exact allocation, but the correct answer would be the one that represents a plausible allocation amount based on the information given.

Use the Following Information to Answer the Following Questions