Allocate service department costs to operating departments

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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

2,000

37,000

1,000

41,000

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.

Reference no: EM131807433

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