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(Appendix 4B) Romain Surgical Hospital uses the direct method to allocate service department costs to operating departments. The hospital has two service departments, Information Technology and Administration, and two operating departments, Surgery and Recovery. (Appendix 4B) Romain Surgical Hospital uses the direct method to allocate service department costs to operating departments. The hospital has two service departments, Information Technology and Administration, and two operating departments, Surgery and Recovery. Information Technology Department costs are allocated on the basis of computer workstations and Administration Department costs are allocated on the basis of employees. -The total amount of Information Technology Department cost allocated to the two operating departments is closest to: A) $18,019 B) $109,015 C) $21,587 D) $25,956 Information Technology Department costs are allocated on the basis of computer workstations and Administration Department costs are allocated on the basis of employees. -The total amount of Information Technology Department cost allocated to the two operating departments is closest to:


A) $18,019
B) $109,015
C) $21,587
D) $25,956

E) A) and D)
F) A) and C)

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Vitro Corporation has two service departments,Service Department A and Service Department B,and two operating departments,Operating Department X and Operating Department Y. Vitro Corporation has two service departments,Service Department A and Service Department B,and two operating departments,Operating Department X and Operating Department Y. The company uses the step-down method to allocate service department costs to operating departments.Service Department A costs are allocated first on the basis of allocation base A and Service Department B costs are allocated second on the basis of allocation base B. Required: Allocate the service department costs to the operating departments using the step-down method. The company uses the step-down method to allocate service department costs to operating departments.Service Department A costs are allocated first on the basis of allocation base A and Service Department B costs are allocated second on the basis of allocation base B. Required: Allocate the service department costs to the operating departments using the step-down method.

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Allocation base for Service De...

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Kolinski Surgical Hospital uses the direct method to allocate service department costs to operating departments.The hospital has two service departments,Telecommunications and Administration,and two operating departments,Surgery and Recovery. Kolinski Surgical Hospital uses the direct method to allocate service department costs to operating departments.The hospital has two service departments,Telecommunications and Administration,and two operating departments,Surgery and Recovery. Telecommunications Department costs are allocated on the basis of the number of telecommunications ports in departments and Administration Department costs are allocated on the basis of employees.The total Surgery Department cost after service department allocations is closest to: A) $317,118 B) $314,853 C) $310,244 D) $305,921 Telecommunications Department costs are allocated on the basis of the number of telecommunications ports in departments and Administration Department costs are allocated on the basis of employees.The total Surgery Department cost after service department allocations is closest to:


A) $317,118
B) $314,853
C) $310,244
D) $305,921

E) None of the above
F) B) and D)

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(Appendix 4B) Romain Surgical Hospital uses the direct method to allocate service department costs to operating departments. The hospital has two service departments, Information Technology and Administration, and two operating departments, Surgery and Recovery. (Appendix 4B) Romain Surgical Hospital uses the direct method to allocate service department costs to operating departments. The hospital has two service departments, Information Technology and Administration, and two operating departments, Surgery and Recovery. Information Technology Department costs are allocated on the basis of computer workstations and Administration Department costs are allocated on the basis of employees. -The total Surgery Department cost after service department allocations is closest to: A) $598,249 B) $608,636 C) $602,727 D) $605,827 Information Technology Department costs are allocated on the basis of computer workstations and Administration Department costs are allocated on the basis of employees. -The total Surgery Department cost after service department allocations is closest to:


A) $598,249
B) $608,636
C) $602,727
D) $605,827

E) B) and C)
F) All of the above

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City Medical Clinic has two service departments,Building Services and Energy,and three operating departments,Pediatrics,Geriatrics,and Surgery.The clinic allocates the cost of Building Services on the basis of square footage and Energy on the basis of patient days.No distinction is made between variable and fixed costs.Budgeted operating data for the year just completed follow: City Medical Clinic has two service departments,Building Services and Energy,and three operating departments,Pediatrics,Geriatrics,and Surgery.The clinic allocates the cost of Building Services on the basis of square footage and Energy on the basis of patient days.No distinction is made between variable and fixed costs.Budgeted operating data for the year just completed follow: Required: a.Prepare a schedule to allocate service department costs to operating departments by the direct method (round all dollar amounts to the nearest whole dollar). b.Prepare a schedule to allocate service department costs to operating departments by the step-down method,allocating Building Services first (round all amounts to the nearest whole dollar). Required: a.Prepare a schedule to allocate service department costs to operating departments by the direct method (round all dollar amounts to the nearest whole dollar). b.Prepare a schedule to allocate service department costs to operating departments by the step-down method,allocating Building Services first (round all amounts to the nearest whole dollar).

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a.Direct Method
Allocation base for Buil...

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(Appendix 4B) Watts Corporation has a Custodial Services Department that services the company's Maintenance Department and its two operating departments. Costs of the Custodial Services Department are allocated to other departments on the basis of square feet of space occupied. The amount of space occupied by each department is given below: (Appendix 4B) Watts Corporation has a Custodial Services Department that services the company's Maintenance Department and its two operating departments. Costs of the Custodial Services Department are allocated to other departments on the basis of square feet of space occupied. The amount of space occupied by each department is given below: Budgeted costs in the Custodial Services Department total $43,200. -Suppose the company uses the direct method of allocation.The amount of Custodial Services Department cost allocated to Operating Department 2 would be: A) $25,920 B) $27,000 C) $28,800 D) $21,600 Budgeted costs in the Custodial Services Department total $43,200. -Suppose the company uses the direct method of allocation.The amount of Custodial Services Department cost allocated to Operating Department 2 would be:


A) $25,920
B) $27,000
C) $28,800
D) $21,600

E) A) and B)
F) None of the above

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The direct method is used by Kurpinski Clinic to allocate its service department costs to its operating departments.Data concerning those departments follow: The direct method is used by Kurpinski Clinic to allocate its service department costs to its operating departments.Data concerning those departments follow: Information Technology costs are allocated on the basis of computers and Personnel costs are allocated on the basis of employees. Required: Allocate the service department costs to the operating departments using the direct method. Information Technology costs are allocated on the basis of computers and Personnel costs are allocated on the basis of employees. Required: Allocate the service department costs to the operating departments using the direct method.

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Allocation base for Informatio...

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Behrend Clinic uses the direct method to allocate service department costs to operating departments.The clinic has two service departments,Personnel and Support,and two operating departments,Prenatal and Pediatrics. Behrend Clinic uses the direct method to allocate service department costs to operating departments.The clinic has two service departments,Personnel and Support,and two operating departments,Prenatal and Pediatrics. Personnel Department costs are allocated on the basis of employee hours and Support Department costs are allocated on the basis of space occupied in square feet.The total Pediatrics Department cost after the allocations of service department costs is closest to: A) $441,260 B) $443,660 C) $433,440 D) $444,471 Personnel Department costs are allocated on the basis of employee hours and Support Department costs are allocated on the basis of space occupied in square feet.The total Pediatrics Department cost after the allocations of service department costs is closest to:


A) $441,260
B) $443,660
C) $433,440
D) $444,471

E) C) and D)
F) None of the above

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The step-down method of allocating service department costs:


A) is a less accurate method of allocation than the direct method.
B) can't be used when a company has more than two service departments.
C) is a simpler allocation method than the direct method.
D) ignores some interdepartmental services.

E) A) and C)
F) C) and D)

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(Appendix 4B) Seidell Corporation has two service departments, Administrative and Facilities, and two operating departments, Assembly and Customer Solutions. (Appendix 4B) Seidell Corporation has two service departments, Administrative and Facilities, and two operating departments, Assembly and Customer Solutions. The company uses the direct method to allocate service department costs to operating departments. Administrative costs are allocated on the basis of employee hours and Facilities costs are allocated on the basis of space occupied. -The total amount of Administrative Department cost allocated to the Assembly Department is closest to: A) $26,730 B) $25,568 C) $42,414 D) $23,522 The company uses the direct method to allocate service department costs to operating departments. Administrative costs are allocated on the basis of employee hours and Facilities costs are allocated on the basis of space occupied. -The total amount of Administrative Department cost allocated to the Assembly Department is closest to:


A) $26,730
B) $25,568
C) $42,414
D) $23,522

E) A) and B)
F) B) and C)

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(Appendix 4B) Yamane Corporation, a manufacturer, uses the step-down method to allocate service department costs to operating departments. The company has two service departments, Administration and Facilities, and two operating departments, Assembly and Finishing. Data concerning those departments follow: (Appendix 4B) Yamane Corporation, a manufacturer, uses the step-down method to allocate service department costs to operating departments. The company has two service departments, Administration and Facilities, and two operating departments, Assembly and Finishing. Data concerning those departments follow: Administration Department costs are allocated first on the basis of labor hours and Facilities Department costs are allocated second on the basis of space occupied. -In the first step of the allocation,the amount of Administration Department cost allocated to the Assembly Department is closest to: A) $4,476 B) $12,838 C) $11,310 D) $12,180 Administration Department costs are allocated first on the basis of labor hours and Facilities Department costs are allocated second on the basis of space occupied. -In the first step of the allocation,the amount of Administration Department cost allocated to the Assembly Department is closest to:


A) $4,476
B) $12,838
C) $11,310
D) $12,180

E) A) and B)
F) C) and D)

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Vercher Natal Clinic uses the step-down method to allocate service department costs to operating departments.The clinic has two service departments,Administration and Information Technology (IT),and two operating departments,Prenatal Care and Postnatal Care. Vercher Natal Clinic uses the step-down method to allocate service department costs to operating departments.The clinic has two service departments,Administration and Information Technology (IT),and two operating departments,Prenatal Care and Postnatal Care. Administration Department costs are allocated first on the basis of employees and IT Department costs are allocated second on the basis of computers. Required: Allocate the service department costs to the operating departments using the step-down method. Administration Department costs are allocated first on the basis of employees and IT Department costs are allocated second on the basis of computers. Required: Allocate the service department costs to the operating departments using the step-down method.

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Allocation base for Administra...

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(Appendix 4B) Anchor Corporation has two service departments, Personnel and Engineering, and two operating departments. The costs of the Personnel Department are allocated to other departments on the basis of the number of employees in the departments. Departments and number of employees are as follows: (Appendix 4B) Anchor Corporation has two service departments, Personnel and Engineering, and two operating departments. The costs of the Personnel Department are allocated to other departments on the basis of the number of employees in the departments. Departments and number of employees are as follows: Costs in the Personnel Department total $168,283 per year. -Assume that SJM uses the step-down method to allocate service department costs,starting with Maintenance.The total overhead allocated from Maintenance to Mining would be closest to: A) $25,143 B) $22,957 C) $51,150 D) $16,800 Costs in the Personnel Department total $168,283 per year. -Assume that SJM uses the step-down method to allocate service department costs,starting with Maintenance.The total overhead allocated from Maintenance to Mining would be closest to:


A) $25,143
B) $22,957
C) $51,150
D) $16,800

E) A) and B)
F) A) and C)

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(Appendix 4B) Prestwich Corporation has two service departments and two operating departments. Costs of the Building and Grounds service department are allocated to other departments on the basis of square feet of space occupied. The departments in the company and the amount of space occupied by each are presented below: (Appendix 4B) Prestwich Corporation has two service departments and two operating departments. Costs of the Building and Grounds service department are allocated to other departments on the basis of square feet of space occupied. The departments in the company and the amount of space occupied by each are presented below: Budgeted costs in the Building and Grounds department total $34,800 for the year. -Assuming the step-down method is used and Building and Grounds costs are allocated first,the amount of Building and Grounds costs allocated to the Cafeteria would be: A) $0 B) $4,800 C) $4,640 D) $5,568 Budgeted costs in the Building and Grounds department total $34,800 for the year. -Assuming the step-down method is used and Building and Grounds costs are allocated first,the amount of Building and Grounds costs allocated to the Cafeteria would be:


A) $0
B) $4,800
C) $4,640
D) $5,568

E) A) and B)
F) C) and D)

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(Appendix 4B) Maute Clinic has two service departments, Administrative and Support, and two operating departments, Adult Medicine and Pediatrics. (Appendix 4B) Maute Clinic has two service departments, Administrative and Support, and two operating departments, Adult Medicine and Pediatrics. The clinic uses the direct method to allocate service department costs to operating departments. Administrative Department costs are allocated on the basis of employee hours and Support Department costs are allocated on the basis of space occupied in square feet. -The total amount of Administrative Department cost allocated to the Adult Medicine Department is closest to: A) $13,636 B) $14,610 C) $20,382 D) $15,340 The clinic uses the direct method to allocate service department costs to operating departments. Administrative Department costs are allocated on the basis of employee hours and Support Department costs are allocated on the basis of space occupied in square feet. -The total amount of Administrative Department cost allocated to the Adult Medicine Department is closest to:


A) $13,636
B) $14,610
C) $20,382
D) $15,340

E) All of the above
F) B) and D)

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(Appendix 4B) Muckenfuss Clinic uses the step-down method to allocate service department costs to operating departments. The clinic has two service departments, Personnel and Information Technology (IT) , and two operating departments, Family Medicine and Geriatric Medicine. Data concerning those departments follow: (Appendix 4B) Muckenfuss Clinic uses the step-down method to allocate service department costs to operating departments. The clinic has two service departments, Personnel and Information Technology (IT) , and two operating departments, Family Medicine and Geriatric Medicine. Data concerning those departments follow: Personnel costs are allocated first on the basis of employees and IT costs are allocated second on the basis of PCs. -In the first step of the allocation,the amount of Personnel Department cost allocated to the Family Medicine Department is closest to: A) $23,920 B) $58,405 C) $23,049 D) $26,366 Personnel costs are allocated first on the basis of employees and IT costs are allocated second on the basis of PCs. -In the first step of the allocation,the amount of Personnel Department cost allocated to the Family Medicine Department is closest to:


A) $23,920
B) $58,405
C) $23,049
D) $26,366

E) A) and D)
F) B) and C)

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(Appendix 4B) Seidell Corporation has two service departments, Administrative and Facilities, and two operating departments, Assembly and Customer Solutions. (Appendix 4B) Seidell Corporation has two service departments, Administrative and Facilities, and two operating departments, Assembly and Customer Solutions. The company uses the direct method to allocate service department costs to operating departments. Administrative costs are allocated on the basis of employee hours and Facilities costs are allocated on the basis of space occupied. -The total Customer Solutions Department cost after the allocations of service department costs is closest to: A) $269,175 B) $254,470 C) $270,593 D) $271,300 The company uses the direct method to allocate service department costs to operating departments. Administrative costs are allocated on the basis of employee hours and Facilities costs are allocated on the basis of space occupied. -The total Customer Solutions Department cost after the allocations of service department costs is closest to:


A) $269,175
B) $254,470
C) $270,593
D) $271,300

E) None of the above
F) All of the above

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(Appendix 4B) Anchor Corporation has two service departments, Personnel and Engineering, and two operating departments. The costs of the Personnel Department are allocated to other departments on the basis of the number of employees in the departments. Departments and number of employees are as follows: (Appendix 4B) Anchor Corporation has two service departments, Personnel and Engineering, and two operating departments. The costs of the Personnel Department are allocated to other departments on the basis of the number of employees in the departments. Departments and number of employees are as follows: Costs in the Personnel Department total $168,283 per year. -Assuming that SJM allocates service department costs using the direct method,the total cost allocated from Cafeteria to Mining would be closest to: A) $21,687 B) $15,750 C) $23,684 D) $22,500 Costs in the Personnel Department total $168,283 per year. -Assuming that SJM allocates service department costs using the direct method,the total cost allocated from Cafeteria to Mining would be closest to:


A) $21,687
B) $15,750
C) $23,684
D) $22,500

E) B) and C)
F) A) and C)

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(Appendix 4B) Blondell Legal Services, LLC, uses the step-down method to allocate service department costs to operating departments. The firm has two service departments, Personnel and Information Technology (IT) , and two operating departments, Family Law and Corporate Law. Data concerning those departments follow: (Appendix 4B) Blondell Legal Services, LLC, uses the step-down method to allocate service department costs to operating departments. The firm has two service departments, Personnel and Information Technology (IT) , and two operating departments, Family Law and Corporate Law. Data concerning those departments follow: Personnel costs are allocated first on the basis of employees and IT costs are allocated second on the basis of PCs. -In the first step of the allocation,the amount of Personnel Department cost allocated to the Family Law Department is closest to: A) $32,248 B) $70,252 C) $36,336 D) $33,396 Personnel costs are allocated first on the basis of employees and IT costs are allocated second on the basis of PCs. -In the first step of the allocation,the amount of Personnel Department cost allocated to the Family Law Department is closest to:


A) $32,248
B) $70,252
C) $36,336
D) $33,396

E) A) and D)
F) A) and C)

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In both the direct and step-down methods of allocating service department costs,any amount of the allocation base that is attributable to the service department whose cost is being allocated is ignored.

A) True
B) False

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