Quinlan, Inc. has two support departments (Maintenance and Personnel) and two operating departments (Tables and Chairs). The Maintenance department provides more services to the Personnel department than the Personnel department provides to Maintenance. Once the support department costs have been allocated to the operating departments, each operating department allocates its total costs to units produced. Assume the step-down method is used. The amount of cost allocated from Personnel to Maintenance is:
A) $1,500
B) $1,687.50
C) $9,000
D) $0

Question

Quinlan, Inc. has two support departments (Maintenance and Personnel) and two operating departments (Tables and Chairs). The Maintenance department provides more services to the Personnel department than the Personnel department provides to Maintenance. Once the support department costs have been allocated to the operating departments, each operating department allocates its total costs to units produced.  Assume the step-down method is used. The amount of cost allocated from Personnel to Maintenance is:
A) $1,500 
B) $1,687.50 
C) $9,000 
D) $0

Quizplus · Accepted Answer

The Answer of Quinlan, Inc. has two support departments (Maintenance and Personnel) and two operating departments (Tables and Chairs). The Maintenance department provides more services to the Personnel department than the Personnel department provides to Maintenance. Once the support department costs have been allocated to the operating departments, each operating department allocates its total costs to units produced.  Assume the step-down method is used. The amount of cost allocated from Personnel to Maintenance is:
A) $1,500 
B) $1,687.50 
C) $9,000 
D) $0