Yes it's true
Step down method allocates the cost of a service department to other service department and production department.
Question 5 (1 point) ✓ Saved Step down method considers each service department's use of other...
Question 1 (1 point) ✓ Saved Direct Method allocates service department costs to production departments under the assumption that service departments do not use each other's services. True False Question 2 (1 point) ✓ Saved Accounting department costs are $50,000. A firm uses the direct method to allocate service costs It computes overhead rate for allocating accounting costs as $10 per journal entry. The assembly process used 1,000 journal entries during the period. Accounting costs allocated to the assembly process...
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....
When allocating costs using the step-down method (sequential), do we also consider the costs that have incurred to the service departments themselves? For example, Does the cleaning department also considers its own cleaning costs? So basically the cleaning costs of the cleaning department.
Question 4 (1 point) A firm has two service departments: HR and IT. The firm incurs $100,000 in the HR department and $150,000 in the IT department. The firm uses step down method with HR costs allocated first. The overhead rate for allocating HR costs is $1,000 per employee. If the IT department has 50 employees, then the total IT costs allocated to the production departments is $250,000 $150,000 $200,000 $100,000
Robinson Products Company has two service departments (S1 and S2) and two production departments (P1 and P2). The distribution of each service department's efforts (in percentages) to the other departments is: To From S1 S2 P1 P2 S1 78 -20% 30% S2 20% 2 40 The direct operating costs of the departments (including both variable and fixed costs) are: Si $255,000 85,000 63,000 P2 185,000 S2 P1 Required: 1. Determine the total cost of P1 and P2 using the direct...
Robinson Products Company has two service departments (S1 and S2) and two production departments (P1 and P2). The distribution of each service department's efforts (in percentages) to the other departments is: To From S1 S2 P1 P2 S1 78 -20% 30% S2 20% 2 40 The direct operating costs of the departments (including both variable and fixed costs) are: Si $255,000 85,000 63,000 P2 185,000 S2 P1 Required: 1. Determine the total cost of P1 and P2 using the direct...
Robinson Products Company has two service departments (S1 and S2) and two production departments (P1 and P2) The distribution of each service department's efforts (in percentages) to the other departments is: 20 7 30 The direct operating costs of the departments (including both variable and fixed costs) are: S1 $225,000 $2 $2 2,000 P2 165,000 Required 1. Determine the total cost of P1 and P2 using the direct method. 2. Determine the total cost of P1 and P2 using the...
When the __________ method is used to apply overhead to products, overhead costs are first directly traced or distributed to support and manufacturing departments. activity-based costing single plantwide rate multiple production department rates None of the above In the context of activity-based costing, transferring overhead costs to support and production departments is referred to as __________ overhead costs. assigning allocating applying distributing In the context of allocating support department costs to production departments, which of the following methods is the...
Problem 4B-6 Step-Down Method versus Direct Method; Predetermined Overhead Rates [LO4-10, LO4-11] The Sendai Co., Ltd., of Japan has budgeted costsin its various departments as follows for the coming уear: Factory Administration Custodial Services 825,470 108,831 Personnel 28,970 60,569 633,098 865,282 $2,522,220 Maintenance Machining-overhead Assembly-overhead Total cost The company allocates service department coststo other departments in the order listed below. Square Feet of Total Direct Number of Labor Labor- Machine- Space Hours Occupied Employees Department Factory Administration Custodial Services Hours...
1. The Hsu Manufacturing Company has two service departments: Maintenance and Accounting. The Maintenance Department's costs of $792,000 are allocated on the basis of machine hours. The Accounting Department's costs of $171,600 are allocated on the basis of the number of employees within a specific department. The direct departmental costs for A and B are $250,000 and $450,000, respectively. Maint Acctg A B Machine hours 590 100 3,600 360 Number of employees 2 2 8 4 What is the Maintenance...