Reference no: EM132740599

Broadway Department Store allocates the HR and IT departments costs to the sales departments of shoes, and clothing. HR costs are allocated by number of employees, and IT costs ar allocated by support minutes.
HR and IT also provide services to each other.

Costs and other informtion for january were as follows:

                                           HR              IT               Shoes               Clothing

Department costs         $13,800        $6,400      $24,400        $40,000
Support Minutes               3,000         4,500           7,500
Number of employees                          3                      5              12

REQUIRED:

Problem 1: Allocate service costs using the step-down method with the sequence of allocation based on highest percentage support concept.