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Dallas Cleaning: Allocating Costs, Direct method, step down

Please see attached file.
(questions below yellow highlighted line)

Chapter 12 Decision Guideline Dallas Cleaning Cost Allocations from Service Departments to Producing Departments July 17, 2011

Personnel Administrative Residental Commercial Total Res/Comm TotalAdmin/Res/Comm Grand Total
Direct Department Costs $70,000 $90,000 $240,000 $400,000 $640,000 $640,000
Number of Employees 6 10 36 24 60 60

Direct Method:
Direct Department Costs $70,000 $90,000 $240,000 $400,000 $640,000 $640,000
Personnel Allocation
Administrative Allocation
Total Costs

Step Down Method:
Direct Department Costs $70,000 $90,000 $240,000 $400,000 $640,000 $640,000
Step 1--Personnel Allocation
Step 2--Administrative Allocation
Total Costs

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Solution Summary

Your tutorial completes the computations for you in Excel so you have a template for similar problems. The response includes two paragraphs recommending a particular method with two reasons for it.

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