Finkler Legal Services, LLC, Uses the Step-Down Method to Allocate

question 36

Essay

Finkler Legal Services, LLC, uses the step-down method to allocate service department costs to operating departments. The firm has two service departments, Personnel and Information Technology (IT), and two operating departments, Family Law and Corporate Law. 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.
-Maclennan Corporation uses the direct method to allocate service department costs to operating departments. The company has two service departments, Administrative and Facilities, and two operating departments, Assembly and Finishing.
Administrative Department costs are allocated on the basis of employee hours and Facilities Department costs are allocated on the basis of space occupied.
Required:
Allocate the service department costs to the operating departments using the direct method.

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Definitions:

Preparedness

The state of being ready and able to deal with specific situations or emergencies, often through planning and training.

Nigrostriatal Dopamine Pathway

A neural pathway connecting the substantia nigra with the striatum, involved in the regulation of movement and implicated in Parkinson's disease.

Mesolimbic Dopamine Pathway

A neural pathway in the brain associated with the reinforcement of rewarding experiences and motivation, often implicated in addiction and pleasure.

Serotonin Pathway

A set of neural pathways in the brain that utilize serotonin to regulate mood, emotion, sleep, and appetite.