Rondo Children's Clinic Allocates Service Department Costs to Operating Departments

question 12

Multiple Choice

Rondo Children's Clinic allocates service department costs to operating departments using the step-down method.The clinic has two service departments,Administration and Information Technology (IT) ,and two operating departments,Prenatal and Pediatric.Data concerning those departments follow:
Administration costs are allocated first on the basis of employees and IT costs are allocated second on the basis of PCs.The total Pediatric Department cost after allocations is closest to:

• A) $311,117
• B) $280,845
• C) $304,995
• D) $311,400

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