Question
IBM uses the step-down method for cost allocation. The following data is available: Service Department Costs Before Allocation ($) Allocation Basis Total Allocation Basis IT
IBM uses the step-down method for cost allocation. The following data is available:
Service Department | Costs Before Allocation ($) | Allocation Basis | Total Allocation Basis |
IT Support | $500,000 | Number of computers | 500 |
Maintenance | $350,000 | Square footage | 150,000 |
The IT Support department has 200 computers, and the Maintenance department occupies 45,000 square feet. Allocate the costs to these departments.
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Financial and Managerial Accounting Information for Decisions
Authors: John Wild, Ken Shaw, Barbara Chiappetta
5th edition
978-1259317552, 1259317552, 978-0078025600, 78025605, 978-1259335013, 1259335011, 978-1259347641
