Wiedenheft Children's Clinic Allocates Service Department Costs to Operating Departments

question 32

Multiple Choice

Wiedenheft Children's Clinic allocates service department costs to operating departments using the step-down method. The clinic has two service departments, Administration and Information Technology (IT) , and two operating departments, Prenatal and Pediatric. Data concerning those departments follow:
Administration costs are allocated first on the basis of employees and IT costs are allocated second on the basis of PCs. The total Pediatric Department cost after allocations is closest to:

• A) $390,036
• B) $380,828
• C) $389,712
• D) $365,886

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Definitions:

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Businesses that are at least 51% owned, operated, and controlled on a daily basis by one or more (in combination) minority group members.

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Service Innovation

The introduction of new or improved services to meet customer needs more effectively, often involving new technologies or business models.

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