Reddicks Clinic Uses the Step-Down Method to Allocate Service Department

question 4

Multiple Choice

Reddicks Clinic uses the step-down method to allocate service department costs to operating departments.The clinic has two service departments,Personnel and Information Technology (IT) ,and two operating departments,Family Medicine and Pediatrics.Data concerning those departments follow:
Personnel costs are allocated first on the basis of employees and IT costs are allocated second on the basis of PCs.The total Pediatrics Department cost after allocations is closest to:

• A) $345,462
• B) $393,099
• C) $392,838
• D) $383,307

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Definitions:

Hasty Generalization

Drawing a broad conclusion from a small sample or isolated instances.

Accident Fallacy

Refers to a logical fallacy that involves applying a general rule to a specific case it does not apply to, often leading to erroneous conclusions.

Slippery Slope Argument

A logical fallacy that assumes a relatively small first step will lead to a chain of related events culminating in some significant effect, often negative.

Consequences

The results or outcomes that naturally follow from a person's actions or a set of circumstances.