Problem - Wisneski Corporation uses the step-down method to allocate service department costs to operating departments. The company has two service departments, General Management and Physical Plant, and two operating departments, Sales and After-Sales. Data concerning those departments follow:
|
|
Support Departments
|
Operating Departments
|
Total Budget
|
|
|
General Management
|
Physical Pant
|
Sales
|
After Sales
|
|
Overhead Budget before allocations
|
29,880
|
57,240
|
286,590
|
249,650
|
623,360
|
|
Employee time
|
5,000
|
2,000
|
20,000
|
14,000
|
41,000
|
|
Space occupied
|
1,000
|
2,000
|
37,000
|
1,000
|
41,000
|
General Management Department costs are allocated first on the basis of employee time and Physical Plant Department costs are allocated second on the basis of space occupied.
Requirements - Allocate the service department costs to the operating departments using the step-down method. Show your work.