Barbarossa Ltd has two operating divisions: Stage I and Stage II. The company allocates its service...

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Barbarossa Ltd has two operating divisions: Stage I and Stage II. The company allocates its service departments' costs (i.e., Accounting and Health Care) to each operating division. Allocations for the coming accounting period are based on the following data: Service Departments Operating Divisions Accounting Health Care AStage I Stage II Overhead costs (TL) 64,000 61,000 72,500 71,900 Accounting Transactions processed 10,000 40,000 140,397 280,593 Direct Labour Cost (TL) 33,000 66,000 400,000 500,000 Required: Allocate the service departments' costs to the operating divisions using a) the Direct Method and b) the Step-down Method (starting with Accounting to Health Care). Barbarossa Ltd has two operating divisions: Stage I and Stage II. The company allocates its service departments' costs (i.e., Accounting and Health Care) to each operating division. Allocations for the coming accounting period are based on the following data: Service Departments Operating Divisions Accounting Health Care AStage I Stage II Overhead costs (TL) 64,000 61,000 72,500 71,900 Accounting Transactions processed 10,000 40,000 140,397 280,593 Direct Labour Cost (TL) 33,000 66,000 400,000 500,000 Required: Allocate the service departments' costs to the operating divisions using a) the Direct Method and b) the Step-down Method (starting with Accounting to Health Care).

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a Direct method Accounting Healthcare Stage1 Stage 2 Service department costs 6400000 6100000 ... View the full answer