Question: St. Payne Med Center is using the step-down method to allocate costs. They have two support departments (Record Keeping and Cleaning), and two patient service
St. Payne Med Center is using the step-down method to allocate costs. They have two support departments (Record Keeping and Cleaning), and two patient service departments (Eye Care and Dental Care). Some of the Record Keeping costs are allocated to Cleaning before the support department costs are allocated to patient service departments. Record Keeping costs are allocated based on the number of employees, while Cleaning costs are allocated by the number or rooms. The following data has been collected:
| record keeping | cleaning | eye care | dental | |
| department cost | 30000 | 30800 | 61,200 | 120,000 |
| number of employees | 3 | 6 | 9 | 10 |
| number of rooms | 2 | 2 | 6 | 4 |
a. What amount of the Record Keeping is allocated to Cleaning? $
b. What amount of the Record Keeping is allocated to Eye Care? $
c. What amount of the Record Keeping is allocated to Dental Care? $
d. What amount of the Cleaning is allocated to Eye Care? $
e. What amount of the Cleaning is allocated to Dental Care? $
f. After Allocation, What are Eye Cares total costs? $
g. After Allocation, What are Dental Cares total costs? $
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
