Karnofski Corporation uses the step-down method to allocate service department costs to operating departments. The company has two service departments, Service Department A and Service Department B, and two operating departments, Operating Department X and Operating Department Y. Data concerning those departments follow: Service Department A costs are allocated first on the basis of allocation base A and Service Department B costs are allocated second on the basis of allocation base B.
-In the first step of the allocation, the amount of Service Department A cost allocated to the Operating Department X is closest to:
A) $13,599
B) $18,426
C) $16,123
D) $17,430

Question

Karnofski Corporation uses the step-down method to allocate service department costs to operating departments. The company has two service departments, Service Department A and Service Department B, and two operating departments, Operating Department X and Operating Department Y. Data concerning those departments follow:  Service Department A costs are allocated first on the basis of allocation base A and Service Department B costs are allocated second on the basis of allocation base B.
-In the first step of the allocation, the amount of Service Department A cost allocated to the Operating Department X is closest to:
A) $13,599 
B) $18,426 
C) $16,123 
D) $17,430

Quizplus · Accepted Answer

The Answer of Karnofski Corporation uses the step-down method to allocate service department costs to operating departments. The company has two service departments, Service Department A and Service Department B, and two operating departments, Operating Department X and Operating Department Y. Data concerning those departments follow:  Service Department A costs are allocated first on the basis of allocation base A and Service Department B costs are allocated second on the basis of allocation base B.
-In the first step of the allocation, the amount of Service Department A cost allocated to the Operating Department X is closest to:
A) $13,599 
B) $18,426 
C) $16,123 
D) $17,430

Karnofski Corporation Uses the Step-Down Method to Allocate Service Department