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Category > Management Posted 09 Jan 2018 My Price 7.00

Arbon Company

Step-Down Method

Arbon Company has three service departments and two operating departments. Selected data con- cerning the five departments are presented below:

Operating

 

Service Departments                                         Departments

 

Equipment

 

Administrative         Janitorial        Maintenance             Prep                Finishing

Total

Costs . . . . . . . . . . . . . . . . . . . . . . . . . .               $84,000                $67,800               $36,000              $256,100           $498,600

$942,500

Number of employees . . . . . . . . . . . . .                        80                         60                      240                       600                    300

1,280

Square feet of space occupied . . . . . .                   3,000                  12,000                10,000                  20,000               70,000

115,000

Machine-hours . . . . . . . . . . . . . . . . . . .                                                                                                      10,000               30,000

40,000

 

 

 

The company allocates service department costs by the step-down method in the following order: Administrative (number of employees), Janitorial (space occupied), and Equipment Maintenance (machine-hours).

 

Required:

 

Using the step-down method, allocate the service department costs to the operating departments.

 

 

Answers

Maurice Tutor
(5)
Status NEW Posted 09 Jan 2018 09:01 PM My Price 7.00

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