Aderholt Emergency Care Hospital Uses the Step-Down Method to Allocate

question 39

Essay

Aderholt Emergency Care Hospital uses the step-down method to allocate service department costs to operating departments. The hospital has two service departments, Administration and Information Technology (IT), and two operating departments, Emergency Room and Intensive Care.
Administration Department costs are allocated first on the basis of employees and IT Department costs are allocated second on the basis of computers.
Required:
Allocate the service department costs to the operating departments using the step-down method.

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Definitions:

Desertification

The degradation of once-fertile land into nonproductive desert; caused partly by soil erosion, deforestation, and overgrazing by domestic animals.

Deserts

Arid regions with extremely low rainfall, supporting limited plant and animal life, and characterized by harsh conditions such as high temperatures and low humidity.

Primary Consumers

Organisms that directly consume producers such as plants or algae, usually herbivores.

Cyanobacteria

Photosynthetic, bacteria-like organisms that can live in a wide range of habitats, known for their ability to produce oxygen in a process similar to plants.