Expo manufacturing has two production departments and two support departments. The number of employees for each department is as follows: Human Resources shows a budget of $21,000 and accounting, $98,000, for the coming year. Support department costs are allocated on the basis of the number of employees. What amount would be allocated to accounting using the step method?

Question

Expo manufacturing has two production departments and two support departments. The number of employees for each department is as follows:  Human Resources shows a budget of $21,000 and accounting, $98,000, for the coming year. Support department costs are allocated on the basis of the number of employees. What amount would be allocated to accounting using the step method?

Quizplus · Accepted Answer

$0 - because accounting provides more support (based on % of total employees) than hr, costs from hr are not allocated up.

Expo Manufacturing Has Two Production Departments and Two Support Departments