Trusted by Students Everywhere
Why Choose Us?
0% AI Guarantee

Human-written only.

24/7 Support

Anytime, anywhere.

Plagiarism Free

100% Original.

Expert Tutors

Masters & PhDs.

100% Confidential

Your privacy matters.

On-Time Delivery

Never miss a deadline.

 A Company has two service departments

Accounting Nov 12, 2020

 A Company has two service departments. Maintenance and IT. Maintenance Department costs of $320,000 cre allocated on the basis of budgeted maintenance orders. It Department costs of 5480.000 cre alocated based on the number of hour. The conts of operating departments X and Y are $160.000 and $240.000, respectively. Data on budou maintenance orders and number of hours are as follows: of Support Departments Produchon Departments Maintenance IT ? Y Department Department $320,000 $480,000 $160.000 $240.000 Budgeted costs Budgeted maintenance orders NA 40 18 32 Number of hours 200 NA 800 2400 Using the step down method, what amount of Maintenance Department cost will be allocated to Department of the service department with the highest percentage of interdepartmental support service is allocated first? Select one: O a. $ 128,000 Ob $85,333 O c. $ 225,882 Od $240.000 

Expert Solution

 

Answer : B - $85,333

Explanation:

method to be followed: Step Down

First maintainance department cost will be allocated to all other departments on the basis of Budgeted maintainance hours.

This is because maintainance costs has the highest cost and highest percentage of service costs

total budgeted maintainace hours= 40+48+32= 120 maintainance hours

maintainance hours used by Department Y= 32 hours

Answer :

Maintainance cost to be allocated to department = $320,000*32/120= $85,333

Archived Solution
Unlocked Solution

You have full access to this solution. To save a copy with all formatting and attachments, use the button below.

Already a member? Sign In
Important Note: This solution is from our archive and has been purchased by others. Submitting it as-is may trigger plagiarism detection. Use it for reference only.

For ready-to-submit work, please order a fresh solution below.

Or get 100% fresh solution
Get Custom Quote
Secure Payment