Flinders Company has two service departments, Factory Administration and Maintenance, and two operating departments. Selected information relating to these departments is given below: The company allocates service department costs by the step-down method. Costs of Factory Administration are allocated first on the basis of number of employees, and then costs of Maintenance are allocated on the basis of total labor hours.
Required:
Prepare a schedule showing the allocation of service department costs to other departments.

Question

Flinders Company has two service departments, Factory Administration and Maintenance, and two operating departments. Selected information relating to these departments is given below:  The company allocates service department costs by the step-down method. Costs of Factory Administration are allocated first on the basis of number of employees, and then costs of Maintenance are allocated on the basis of total labor hours.
Required:
Prepare a schedule showing the allocation of service department costs to other departments.

Quizplus · Accepted Answer

The Answer of Flinders Company has two service departments, Factory Administration and Maintenance, and two operating departments. Selected information relating to these departments is given below:  The company allocates service department costs by the step-down method. Costs of Factory Administration are allocated first on the basis of number of employees, and then costs of Maintenance are allocated on the basis of total labor hours.
Required:
Prepare a schedule showing the allocation of service department costs to other departments.

Flinders Company Has Two Service Departments, Factory Administration and Maintenance