Bankert Corporation uses the step-down method to allocate service department costs to operating departments.The company has two service departments,General Management and Physical Plant,and two operating departments,Sales and After-Sales.Data concerning those departments follow: General Management Department costs are allocated first on the basis of employee time and Physical Plant Department costs are allocated second on the basis of space occupied.The total After-Sales Department cost after allocations is closest to:
A)$307,594
B)$300,100
C)$310,240
D)$310,376

Question

Bankert Corporation uses the step-down method to allocate service department costs to operating departments.The company has two service departments,General Management and Physical Plant,and two operating departments,Sales and After-Sales.Data concerning those departments follow:  General Management Department costs are allocated first on the basis of employee time and Physical Plant Department costs are allocated second on the basis of space occupied.The total After-Sales Department cost after allocations is closest to:
A)$307,594 
B)$300,100 
C)$310,240 
D)$310,376

Quizplus · Accepted Answer

Allocation base for General Management costs = 2,000 + 33,000 + 13,000 = 48,000
Allocation base for Physical Plant costs = 33,000 + 8,000 = 41,000
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Bankert Corporation Uses the Step-Down Method to Allocate Service Department