(Appendix 4B) The James Corporation has four departments with data as follows:

-Cafeteria costs are allocated on the basis of number of employees.If the step-down method is used with costs of the Cafeteria allocated first,the amount of cost allocated from the Cafeteria to Maintenance would be:
A) $0
B) $625
C) $698
D) $750

Question

(Appendix 4B) The James Corporation has four departments with data as follows:
 
-Cafeteria costs are allocated on the basis of number of employees.If the step-down method is used with costs of the Cafeteria allocated first,the amount of cost allocated from the Cafeteria to Maintenance would be:
A) $0 
B) $625 
C) $698 
D) $750

Quizplus · Accepted Answer

Allocation base = 10 + 84 + 66 = 160
Cost allocated from the Cafeteria to Maintenance = $12,000 × (10/160) = $750

(Appendix 4B) the James Corporation Has Four Departments with Data