Goldfarb's Book and Music Store has two service departments, Warehouse and Data Center. Warehouse Department costs of $310,000 are allocated on the basis of budgeted

warehouse−hours. Data Center Department costs of $100,000 are allocated based on the number of computer log−on hours. The costs of operating departments Music and Books are $102,500 and $123,000, respectively. Data on budgeted warehouse−hours and number of computer log−on hours are as follows:

 

	Support Departments		Production Departments
	Warehouse Department	Data Center Department	Music	Books
Budgeted costs	$310,000	$100,000	$102,500	$123,000
Budgeted warehouse−hours	NA	520	1,080	1,590
Number of computer hours	270	NA	900	1,020

 

Using the

step−down

method, what amount of Warehouse Department cost will be allocated to Department Music if the service department with the highest percentage of interdepartmental support service is allocated first? (Do not round any intermediary calculations.)

 

Answer rating: 100% (QA)

The stepdown method of allocation allocates costs to departments considering the order of allocating ... View the full answer