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Black Ash Eye and Throat Hospital allocates service department costs to operating departments using the step-down method. The hospital has two service departments, Administration and

Black Ash Eye and Throat Hospital allocates service department costs to operating departments using the step-down method. The hospital has two service departments, Administration and Information Technology (IT), and two operating departments, Eye and Throat. Data concerning those departments follow:

Service Department Operating Department

Admin. IT Eye Throat

Departmental costs

80,000 Admin.

65,000 IT

500,600 Eye

350,000 Throat

# of Employees:

15 Admin

60 IT

150 Eye

90 Throat

Work Stations:

20 Admin

30 IT

40 Eye

? Throat

Administration costs are allocated first on the basis of employees and IT costs are allocated second on the basis of Work Stations. After allocation, the Eye Department found out that their total departmental cost is $567,600. How many work stations does the Throat Department have?

A. 113 work stations

B. 60 work stations

C. 80 work stations

D. 24 work stations

E. None of the above

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