Which of the following statements is true of the step-down method? a) The step-down method begins...
Which of the following statements is true of the step-down method?
a) The step-down method begins with the department that provides the least amount of service to other service departments.
b) The step-down method does not allocate service department costs to operating departments.
c) When the step-down method is used, the allocation base attributable to a service department that has already been allocated is ignored.
d) The order of cost allocation does not have any significance under the step-down method.
Thanks guys!!!
Homework Answers
Answer: " c) When the step-down method is used, the allocation base attributable to a service department that has already been allocated is ignored."
=> The step down method is the method that allocates the service costs among the producing/operating departments and the other service departments in the sequence of costs incurred. The highest cost service department is allocated first, followed by the next highest cost service department. The service department whose costs are allocated first are not receivable of any cost later on other service department's cost allocation.
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11. Using the Step-Down Method for this problem. Accounting -
Billing has a total cost pool of $2,112,600. The cost driver has
been determined to number of procedures. What would the allocation
rate be for Accounting/Billings? (Hint: round to the third decimal
place)
Choice A: $11.31 per procedure
Choice B: $1.565 per procedure
Choice C: $3.32 per procedure
Choice D: $8.00 per procedure
#12. Using the Step-Down Method for this problem. Now that you
have calculated the new allocation rate...
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please help me to solve this problem, Thanks!
Problem 48-6 Step-Down Method versus Direct Method; Predetermined Overhead Rates (L04-10, LO4. The Sendai Co., Ltd., of Japan has budgeted costs in its various departments as follows for the coming year. Tactory Administration Custodial Services Personnel Maintenance Machining-overhead Assembly-overhead Total cost $ 819,840 98,337 26, 358 170,555 1,126,484 618.226 $2,859,800 The company allocates service department costs to other departments in the order listed below. Square Total Feet of Direct Number of Labor-...
Zachary Information Services, Inc., has two service departments: human resources and billing. Zachary's operating departments, organized according to the special industry each department serves, are health care, retail, and legal services. The billing department supports only the three operating departments, but the human resources department supports all operating departments and the billing department. Other relevant information follows. Legal Services Human Resources 20 $900,000 Number of employees Annual cost* Annual revenue Billing 50 $2,310,000 84 Health Care 208 $ 6,180,000 $...
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Exercise 48-2 Step-Down Method (L04-11) Madison Park Co-op, a whole foods grocery and gift shop, has provided the following data to be used in its service department cost allocations: Departmental costs before allocations Employee-hours Space occupied-square feet Service Departments Administration Janitorial $210,000 $60,000 460 340 700 1.100 Operating Departments Groceries Gifts $3,900,000 $350,000 2,680 180 9,100 900 Required: Using the step-down method, allocate the costs of the service departments to the two operating departments. Allocate Administration first on the basis...
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11. Using the Step-Down Method for this problem. Accounting -
Billing has a total cost pool of $2,112,600. The cost driver has
been determined to number of procedures. What would the allocation
rate be for Accounting/Billings? (Hint: round to the third decimal
place)
Choice A: $11.31 per procedure
Choice B: $1.565 per procedure
Choice C: $3.32 per procedure
Choice D: $8.00 per procedure
#12. Using the Step-Down Method for this problem. Now that you
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