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

question 11

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.
-Hodgin Corporation uses the direct method to allocate its two service department costs to its two operating departments. Data concerning those departments follow:
B.
Required:
Allocate the service department costs to the operating departments using the direct method.
Service Department A costs are allocated on the basis of allocation base A and Service Department B costs are allocated on the basis of allocation base

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Definitions:

Price Bartering

The negotiation process between buyer and seller to settle on a mutually agreeable price for goods or services.

Operational Code

A set of guidelines or principles that govern the operations, behavior, or decision-making process within an organization or system.

Ethical Situations

Scenarios that require individuals or organizations to make choices based on moral principles and values.

Principle-Based

Relating to or denoting an approach that relies on a set of guiding principles or values to dictate how something is to be done or managed.