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

question 14

Multiple Choice

Duda 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 Geriatric Medicine. 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.
-In the first step of the allocation,the amount of Personnel Department cost allocated to the Family Medicine Department is closest to:

• A)$17,804
• B)$20,296
• C)$37,408
• D)$18,700

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Definitions:

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