Diprima 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 Pediatric.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 Pediatric Department cost after allocations is closest to:
A)$233,732
B)$238,715
C)$238,298
D)$205,318

Question

Diprima 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 Pediatric.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 Pediatric Department cost after allocations is closest to:
A)$233,732 
B)$238,715 
C)$238,298 
D)$205,318

Quizplus · Accepted Answer

Allocation base for Personnel costs = 20 + 137 + 170 = 327
Allocation base for IT costs = 129 + 104 = 233
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Diprima Clinic Uses the Step-Down Method to Allocate Service Department