Grable Corporation Uses the Step-Down Method to Allocate Service Department

question 25

Multiple Choice

Grable Corporation uses the step-down method to allocate service department costs to operating departments. The company has two service departments, General Management and Physical Plant, and two operating departments, Sales and After-Sales. Data concerning those departments follow: General Management Department costs are allocated first on the basis of employee time and Physical Plant Department costs are allocated second on the basis of space occupied. The total After-Sales Department cost after allocations is closest to:

• A)$309,430
• B)$306,713
• C)$293,590
• D)$309,883

---

Definitions:

Right-hand Sides

In linear programming, these are the values on the right side of the equation, representing the constraints or limits of the resources.

Left-hand Sides

Refers typically to the left side of equations or inequalities in mathematical expressions or models.

Excel Solver

A Microsoft Excel add-in program that performs linear, nonlinear, and evolutionary optimization, solving decision-making models.

Fabrication Department

A division within a manufacturing company responsible for constructing and assembling the components of a product.