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Is answer (A) or (E)?

If it's A as other posts say, why is it not E? The question says step-down, so the solution should not be (300,000*2600)/4900 right? Because wouldn't the 300,000 be for DIRECT method and not step down?

Rather, shouldn't it be (E) because (312,200*2600)/4900 where the 312,200 is derived from the allocation sequencing of the step-down method (housekeeping to admin to financial services)???

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Wellspring Clinic has two patient services departments: Medicine and Surgery. The patient services departments are supported by the Housekeeping, Financial Services, and Administration departments. The Administration Department of Wellspring Clinic has compiled the following information:

Housekeeping $200,000 direct costs 3,000 square feet 250 employees Administration $400,000 direct costs 5,000 square feet 500 employees Financial services $300,000 direct costs 2,000 square feet 100 employees Medicine $1 million direct costs 53,000 square feet 2,600 employees Surgery $1.5 million direct costs 40,000 square feet 2,300 employees

Wellspring has determined that the cost driver for the Housekeeping Department is square feet and that the cost driver for Administration and Financial Services is the number of employees. Using the step-down method of cost allocation, what is the allocation of financial services costs to Medicine? Assume Housekeeping's costs are allocated first, followed by Administration's and then by Financial services'.

a. $159,184

b. $161,306

c. $158,080

d. $162,344

e. $165,657

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