Dainels Corporation uses the step-down method to allocate service department costs to operating departments. The...
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Accounting
Dainels Corporation uses the step-down method to allocate service department costs to operating departments. The company has two service departments, General Management and Physical Plant, and two operating departments, Sales and After-Sales. Data concerning those departments follow:
Service Department
Operating Department
General Management
Physical Plant
Sales
After-Sales
Departmental costs
$ 36,550
$ 70,300
$ 412,500
$ 492,780
Employee time
5,000
2,000
27,000
14,000
Space occupied
1,000
1,000
38,000
7,000
General Management Department costs are allocated first on the basis of employee time and Physical Plant Department costs are allocated second on the basis of space occupied. The total After-Sales Department cost after allocations is closest to:
Multiple Choice
$516,196
$515,880
$503,980
$513,911
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