Big Farms LLC has two production departments (Planting and Harvesting)and two service departments (Cafeteria and Repairs. )The service department's costs must be allocated to production departments.Management has decided to allocate the cost of the cafeteria to other departments based upon the average number of employees and the cost of the Repairs Department based upon the number of machine hours used.

Regardless of the allocation method used,Big Farm always starts the allocation process with the Cafeteria Department.
If Big Farm uses the step method,what additional overhead costs should be allocated from the service departments to the Planting Department?

Question

Big Farms LLC has two production departments (Planting and Harvesting)and two service departments (Cafeteria and Repairs. )The service department's costs must be allocated to production departments.Management has decided to allocate the cost of the cafeteria to other departments based upon the average number of employees and the cost of the Repairs Department based upon the number of machine hours used.
  
Regardless of the allocation method used,Big Farm always starts the allocation process with the Cafeteria Department.
If Big Farm uses the step method,what additional overhead costs should be allocated from the service departments to the Planting Department?

Quizplus · Accepted Answer

The Answer of Big Farms LLC has two production departments (Planting and Harvesting)and two service departments (Cafeteria and Repairs. )The service department's costs must be allocated to production departments.Management has decided to allocate the cost of the cafeteria to other departments based upon the average number of employees and the cost of the Repairs Department based upon the number of machine hours used.
  
Regardless of the allocation method used,Big Farm always starts the allocation process with the Cafeteria Department.
If Big Farm uses the step method,what additional overhead costs should be allocated from the service departments to the Planting Department?

Big Farms LLC Has Two Production Departments (Planting and Harvesting)and