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    Step down method

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    Department Financial Managerial Facilities Public Public Health Welfare

    Budgeted costs $8,000 $4,000 $2,000 $5,000 $3,000
    Sq. Ft. Occupied 25 15 10 30 20
    Employees 150 100 50 60 30
    Financial Transactions 35 20 20 40 20

    I need to:

    1. Calculate the total costs for Public Health and Public Welfare using the direct method. Use Financial Transactions for the Financial Dept, Employees for Managerial Dept and Sq. Ft. Occupied for Facilities.
    2. Repeat requirement 1 using the step-down method beginning with Financial then Managerial and then Facilities

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    Solution Summary

    Solution describes how to allocate service department cost using direct method and step down method.