Explain the step-down method of allocating service

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Reference no: EM132088259

Question: XYZ has two service departments: IT and HR; and two operating departments: cutting and assembly. For the information given what are the total operating department costs after using step-down method of allocating service department costs using the preferred sequence for optimal decision support.

Department Total Cost IT Hours used # of employees

IT $2,600 ---- 50

HR 1,400 3,000 ----

Cutting 10,500 6,000 60

Assembly 7,500 3,000 100

Reference no: EM132088259

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