The Natural Springs Water Company uses the step-down method to allocate service department costs in the...

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The Natural Springs Water Company uses the step-down method to allocate service department costs in the following order: Customer Service (space occupied) then Administrative (number of employees). Costs prior to allocation are as follows: Service Departments Customer Service $150,000 Operating Departments Administrative $325,000 Purifying $1,500,000 Bottling $800,000 Department costs Space occupied in square metres Number of employees 30 60 50 40 18 10 80 60 Required: Aliocate the costs of the service departments to the operating departments using the step-down method. The Natural Springs Water Company uses the step-down method to allocate service department costs in the following order: Customer Service (space occupied) then Administrative (number of employees). Costs prior to allocation are as follows: Service Departments Customer Service $150,000 Operating Departments Administrative $325,000 Purifying $1,500,000 Bottling $800,000 Department costs Space occupied in square metres Number of employees 30 60 50 40 18 10 80 60 Required: Aliocate the costs of the service departments to the operating departments using the step-down method.

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