Seymore Uses the Step-Down Method of Cost Allocation and Allocates

question 67

Multiple Choice

Seymore uses the step-down method of cost allocation and allocates cost on the basis of employees.Human Resources cost amounts to $1,200,000,and the department provides more service to the firm than Cafeteria.How much Human Resources cost would be allocated to Assembly?

• A)$0.
• B)$480,572.
• C)$444,444.
• D)$666,666.
• E)Some other amount.

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Definitions:

Current Liability

Financial obligations or debts that are due to be paid within a year or within the normal operating cycle of a business.

GAAP

Stands for Generally Accepted Accounting Principles; the standard framework of guidelines for financial accounting used in any given jurisdiction, including the standards, conventions, and rules accountants follow in recording and summarizing transactions, and in the preparation of financial statements.

Compensated Absences

Employee benefits representing paid time off, such as vacation, sickness, or personal leave, accrued by employees.

Vacation Pay

A benefit offered by employers that compensates employees while they are on leave from work for a vacation.