The Grand Company has budgeted departmental costs and operating activity in its four departments for the coming year as follows: The company does not distinguish between fixed and variable service department costs. Custodial costs are allocated on the basis of square feet occupied. Repair costs are allocated on the basis of the number of repair requests.
-Assume Grand uses the step-down allocation method with Custodial costs allocated first.After all allocations,how much of the company's total overhead cost will be charged to the company's Finishing Department for the coming year?
A)$57,274
B)$55,184
C)$59,777
D)$56,854

Question

The Grand Company has budgeted departmental costs and operating activity in its four departments for the coming year as follows:  The company does not distinguish between fixed and variable service department costs. Custodial costs are allocated on the basis of square feet occupied. Repair costs are allocated on the basis of the number of repair requests.
-Assume Grand uses the step-down allocation method with Custodial costs allocated first.After all allocations,how much of the company's total overhead cost will be charged to the company's Finishing Department for the coming year?
A)$57,274 
B)$55,184 
C)$59,777 
D)$56,854

Quizplus · Accepted Answer

Allocation base for Custodial costs = 200 + 1,200 + 3,600 = 5,000
Allocation base for Repair costs = 220 + 100 = 320
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The Grand Company Has Budgeted Departmental Costs and Operating Activity