The Thomas Corporation has two service departments and two operating departments. The following data are available for a recent period: Thomas allocates service department costs by the step-down method in the following order: Administrative Department costs are allocated first, based on number of employees; Custodial Department costs are allocated second, based on square feet occupied. No distinction is made between fixed and variable costs.After the allocations, the total amount of overhead cost contained in the Finishing Department will be:
A) $156,800
B) $151,300
C) $154,667
D) $138,450

Question

The Thomas Corporation has two service departments and two operating departments. The following data are available for a recent period:  Thomas allocates service department costs by the step-down method in the following order: Administrative Department costs are allocated first, based on number of employees; Custodial Department costs are allocated second, based on square feet occupied. No distinction is made between fixed and variable costs.After the allocations, the total amount of overhead cost contained in the Finishing Department will be:
A) $156,800 
B) $151,300 
C) $154,667 
D) $138,450

Quizplus · Accepted Answer

The Answer of The Thomas Corporation has two service departments and two operating departments. The following data are available for a recent period:  Thomas allocates service department costs by the step-down method in the following order: Administrative Department costs are allocated first, based on number of employees; Custodial Department costs are allocated second, based on square feet occupied. No distinction is made between fixed and variable costs.After the allocations, the total amount of overhead cost contained in the Finishing Department will be:
A) $156,800 
B) $151,300 
C) $154,667 
D) $138,450

The Thomas Corporation Has Two Service Departments and Two Operating