1 The step-down allocation method Select one: a. recognizes the total amount of services that support departments provide to each other b. typically begins with the support department that provides the highest percentage of its total services to other support departments c. allocates complete reciprocated costs d. offers key input for outsourcing decisions e. allocates support department costs to production departments only

1. In the context of allocating support department costs to production departments, which of the following methods is the easiest but the least accurate? a. Step-down method b. Reciprocal services method c. Sequential method d. Direct method 2. In the context of allocating support department costs to production departments, which of the following methods is the most difficult but the most accurate? a. Reciprocal services method b. Step-down method c. Direct method d. Sequential method considers all inter-support- 3. In the context of allocating support department costs to production departments, the department services and is the most difficult to implement when a large number of departments is involved.

docs.google.com/forms/d/e Q 1/ Answer The Following Questions * :Cost objects include .1 products customers departments All of above answers are correct. The general term used to identify both .2 the tracing and the allocation of * :accumulated costs to a cost object is cost accumulation cost assignment cost tracing conversion costing :Budgeted costs are .3 II

The Bramble Company makes wheels and wings for ground transport vehicles and drones. In addition to the key manufacturing departments, Bramble needs two key support services, provided by its Maintenance and IT departments. The Maintenance costs are allocated to other departments based on the square footage of space each department occupies. The IT department allocates its costs to other departments based on the amount of time the IT employees spend assisting the other departments. The cost information of all four departments, along with their usage information for both allocation bases, is as follows. Initial cost Square feet occupied IT labor hours used Support Departments Maintenance IT $120.000 $74.000 1,100 1.800 1,100 Operating Departments Wheels $396,000 2,160 2,280 Wings $700,000 5,040 h 1.720 Totals $1,290,000 10,100 5,100

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Required:1. Allocate the two support departments’ costs to the two operating departments using the following methods: a. Direct methodb. Step-down method (allocate MR first) c. Step-down method (allocate US first) d. The Algebraic/reciprocal method. 2. Compare and explain differences in the support-department costs allocated to each production department. 3. What approaches might be used to decide the sequence in which to allocate support departments when using the step-down method?

(Appendix 4B) The method that assigns support department costs only to producing departments in proportion to each departments usage of the service is known as a. the sequential method. b. the proportional method. c. the reciprocal method. d. the direct method. e. None of these.

Distribution of service department costs to production departments using the sequential distribution method Required: Using the information in P4-6, prepare a schedule showing the distribution of the service departments’ expenses using the sequential distribution method in the order of number of other departments served. (Hint: First distribute the service department that services the greater number of other departments.)

FIFO Method, Two-Department Analysis Refer to the data in Problem 6.38. Required: Prepare a production report for each department using the FIFO method.