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9. Daniels Corporation uses the step-down method to allocate service department costs to operating departments.
The company has two service departments, General Management and Physical Plant, and two operating
departments, Sales, and After-Sales. Data concerning those departments follow:
Service Departments Operating Departments
General Management Physical Plant Sales After Sales
Departmental costs $36,550 $70,300 $412,500 $480,880
Employee time 5,000 2,000 27,000 14,000
Space occupied 1,000 1,000 38,000 7,000
General Management Department costs are allocated first on the basis of employee time and Physical Plant
Department costs are allocated second on the basis of space occupied. The total After-Sales Department cost after
allocations is closest to:
A. $516,196
B. $515,880
C. $503,980 This is the answer
D. $513,911
E. None of the above
10. Uchimura Corp. has two divisions: the AFE Division and the GBI Division. The corporations net income is
$42,000. The AFE Divisions segment profit is $24,300, and the GBI Divisions segment profit is $175,400. What
is the amount of the common fixed expense not traceable to the individual divisions?
A. $148,000
B. $157,700 This is the answer
C. $217,400
D. $161,100
E. None of the above
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