Dainels Corporation Uses the Step-Down Method to Allocate Service Department

question 59

Multiple Choice

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:
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:

• A) $516,196
• B) $515,880
• C) $503,980
• D) $513,911

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