(Appendix 4B) Blondell Legal Services, LLC, uses the step-down method to allocate service department costs to operating departments. The firm has two service departments, Personnel and Information Technology (IT), and two operating departments, Family Law and Corporate Law. Data concerning those departments follow:
Personnel costs are allocated first on the basis of employees and IT costs are allocated second on the basis of PCs.
-The total Corporate Law Department cost after allocations is closest to:
A) $254,137
B) $246,630
C) $254,301
D) $209,149

Question

(Appendix 4B) Blondell Legal Services, LLC, uses the step-down method to allocate service department costs to operating departments. The firm has two service departments, Personnel and Information Technology (IT), and two operating departments, Family Law and Corporate Law. Data concerning those departments follow:
  Personnel costs are allocated first on the basis of employees and IT costs are allocated second on the basis of PCs.
-The total Corporate Law Department cost after allocations is closest to:
A) $254,137 
B) $246,630 
C) $254,301 
D) $209,149

Quizplus · Accepted Answer

Allocation base for Personnel costs = 25 + 121 + 163 = 309
Allocation base for IT costs = 112 + 137 = 249
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(Appendix 4B) Blondell Legal Services, LLC, Uses the Step-Down Method