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    Allocation of service costs-step-down method

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    Using the following example, allocate service center costs to each of the three revenue centers using the step-down method:
    Full-time
    Costs Square Feet Meals Employees
    Service Centers
    Maintenance $150,000 ----- 2,500 10
    Dietary 400,000 10,000 ---- 15
    Administrative 600,000 20,000 2,500 10

    Revenue Centers
    Laboratory 600,000 30,000 2,500 20
    Radiology 800,000 40,000 2,500 30
    Nursing 2,000,000 100,000 30,000 50
    $ 4,550,000 200,000 40,000 135

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    https://brainmass.com/business/sales-revenue/allocation-service-costs-step-down-method-79146

    Solution Summary

    Allocates service center costs to the revenue centers using the step-down method.

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