Use the Information Below to Answer the Following Question(s)

question 164

Multiple Choice

Use the information below to answer the following question(s) .
Farm Fresh Dairy provided the following expense information for May:

-What is the total cost for the design category of the value chain at Farm Fresh Dairy?

• A) $88,000
• B) $84,000
• C) $155,000
• D) $239,000

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Definitions:

Step-down Method

An allocation method used in cost accounting to assign overhead costs to different departments based on a hierarchical order.

Labor Hours

The total number of hours worked by employees for which they are compensated, often used as a basis for allocating overhead in cost accounting.

Space Occupied

The amount of physical area taken up by an entity, such as inventory in a warehouse or machinery in a factory.

Step-down Method

A method used in cost accounting to allocate service department costs to production departments in multiple steps, based on the services rendered.