Direct and Step Down Allocations
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Chapter 12 Decision Guideline
Dallas Cleaning
Costs Allocations form Service Departments to Producing Departments
14/07/2010
Personnel Administrative Residential commercial Total Res/Comm Total Admin/Res/Comm Grand Total
Direct Department Costs $70,000 $90,000 $240,000 $400,000 ??? ????
Number of Employees 6 10 36 24 ???? ?????
Direct Method
Direct Department Costs $70,000 $90,000 $240,000 $400,000
Personnel Allocation ????? ?????? 42000 28000
Administrative Allocation ????? ????? 54000 36000
Total Costs ????? ?????? $336,000 $464,000 ?????
Step-Down Method
Direct Department Costs $70,000.00 $90,000.00 $240,000.00 $400,000.00
Personnel Actions ?????? 10000 36000 24000
Administrative Allocation ?????? ?????? 60000 40000
Total Costs ??????? ??????? $336,000.00 $464,000.00 ??????
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Solution Summary
The solution explains how to allocate cost using direct and step down methods
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