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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

Answer & Explanation Solved by verified expert
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