Using the step method, Natasha allocates Custodial Department costs based on square footage serviced and budgets $25,000 for the coming period. She allocates Accounting Department costs based on the number of employees served and is budgeting $105,000 for the next period. She shows the following information about the two service departments and two production departments. Assuming Natasha allocates the accounting costs first, how much support costs would be allocated to the Custodial Department?

Question

Using the step method, Natasha allocates Custodial Department costs based on square footage serviced and budgets $25,000 for the coming period. She allocates Accounting Department costs based on the number of employees served and is budgeting $105,000 for the next period. She shows the following information about the two service departments and two production departments.  Assuming Natasha allocates the accounting costs first, how much support costs would be allocated to the Custodial Department?

Quizplus · Accepted Answer

25 + 120 + 40 = 185
25 ÷ 185 x $105,000 = $14,189
Cust # of empl + mach # of empl + assm # of empl = total # of empl
Cust # of empl ÷ total # of empl = acct cost alloc to cust

Using the Step Method, Natasha Allocates Custodial Department Costs Based