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

question 42

Multiple Choice

Clopton 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.
-The total Geriatric Medicine Department cost after allocations is closest to:

• A) $113,020
• B) $134,101
• C) $139,700
• D) $139,601

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