Question

In Middletown Children’s Clinic (Part 4), we did not perform direct or step-down methods for the dual-rate costs. Following are the allocation bases for these costs.


REQUIRED
A. Draw a diagram of the direct method for the Middletown Children’s Clinic allocations using three support departments.
B. Allocate the support department costs using dual rates and the direct method.
C. Draw a diagram of the step-down method using the three support departments.
D. Allocate the support department costs using dual rates and the step-down method.
E. Write out the simultaneous equations for the reciprocal allocation.
F. Set up a spreadsheet that uses Excel Solver to solve the simultaneous equations and then allocates support costs using dual rates and the reciprocal method.


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  • CreatedJanuary 26, 2015
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