Direct and Step-Down Allocations
Not what you're looking for?
Butler Home Products has two producing departments, Machining and Assembly, and two service departments, Personnel and Custodial.
The company's budget for April 20X7 is
Service Departments Production Departments
Personnel Custodial Machining Assembly
Direct department costs $32,000 $70,000 $600,000 $800,000
Square feet 2,000 1,000 10,000 25,000
Number of employees 15 30 200 250
Butler allocates personnel costs on the basis of number of employees. Butler allocates custodial costs on the basis of square feet.
1. Allocate personnel and custodial costs to the producing departments using the direct method.
2. Allocate personnel and custodial costs to the producing departments using the step-down method. Allocate personnel costs first.
Purchase this Solution
Solution Summary
The solution explains cost allocation using direct and step-down methods
Purchase this Solution
Free BrainMass Quizzes
Managing the Older Worker
This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce
Cost Concepts: Analyzing Costs in Managerial Accounting
This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.
Six Sigma for Process Improvement
A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.
Situational Leadership
This quiz will help you better understand Situational Leadership and its theories.
Accounting: Statement of Cash flows
This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.