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Problem - Wisneski Corporation uses the step-down method to allocate service department costs to operating departments. The company has two service departments, General Management and Physical Plant, and two operating departments, Sales and After-Sales. Data concerning those departments follow:
Support Departments
Operating Departments
Total Budget
General Management
Physical Pant
Sales
After Sales
Overhead Budget before allocations
29,880
57,240
286,590
249,650
623,360
Employee time
5,000
2,000
20,000
14,000
41,000
Space occupied
1,000
37,000
General Management Department costs are allocated first on the basis of employee time and Physical Plant Department costs are allocated second on the basis of space occupied.
Requirements - Allocate the service department costs to the operating departments using the step-down method. Show your work.
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