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Indirect cost group Direct costs Facilities $5,212,544 City Admin $1,475,241 Departments Fire $45,218,534 Water $35,248,612 Parks $15,025,842 Boomtown is preparing a cost analysis of three
Indirect cost group | Direct costs |
Facilities | $5,212,544 |
City Admin | $1,475,241 |
Departments | |
Fire | $45,218,534 |
Water | $35,248,612 |
Parks | $15,025,842 |
Boomtown is preparing a cost analysis of three departments: Parks, Fire, and Water. To comply with accuracy standards in allocating indirect costs, Boomtown will employ the step-down method of cost allocation. There are two indirect cost groups that are allo-cated: city administration and facilities. Costs for facilities are allocated first, and then costs for city administration are allocated. Using the data in Table 5.5, prepare the cost allocation using direct cost as the base and determine the full cost of the departments.
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