Rondo Children's Clinic allocates service department costs to operating departments using the step-down method.The clinic has two service departments,Administration and Information Technology (IT),and two operating departments,Prenatal and Pediatric.Data concerning those departments follow:
Administration costs are allocated first on the basis of employees and IT costs are allocated second on the basis of PCs.The total Pediatric Department cost after allocations is closest to:
A) $311,117
B) $280,845
C) $304,995
D) $311,400

Question

Rondo Children's Clinic allocates service department costs to operating departments using the step-down method.The clinic has two service departments,Administration and Information Technology (IT),and two operating departments,Prenatal and Pediatric.Data concerning those departments follow:
 Administration costs are allocated first on the basis of employees and IT costs are allocated second on the basis of PCs.The total Pediatric Department cost after allocations is closest to:
A) $311,117 
B) $280,845 
C) $304,995 
D) $311,400

Quizplus · Accepted Answer

The Answer is A

Rondo Children's Clinic Allocates Service Department Costs to Operating Departments