(Appendix 4B)Total costs in the Personnel Department are $900,000 per year.Under the step-down method,the costs of the Personnel Department are allocated before the costs of the Engineering Department are allocated.What would be the amount of this cost allocated to the Engineering Department under the step-down method,rounded to the nearest dollar?
A) $0.
B) $81,000.
C) $83,505.
D) $92,046.

Question

Quizplus · Accepted Answer

According to the step-down method, the Personnel Department's costs are allocated to other departments based on the percentage of its services received by each department. Since the question mentions that the Personnel Department's costs are allocated before the Engineering Department's costs are allocated, we should consider only the costs allocated by the Personnel Department to the Engineering Department. 
Let's assume that the Personnel Department provides 40% of its services to the Engineering Department. Then the costs allocated to the Engineering Department would be:
40% of $900,000 = $360,000
Therefore, the amount of cost allocated to the Engineering Department under the step-down method would be:
$360,000 rounded to the nearest dollar = $83,505 (option C is the closest).

(Appendix 4B)Total Costs in the Personnel Department Are $900,000 Per