Unformatted text preview: Maintenance 1,000 4 1 225,000 Food Services 3,000 2 1 260,000 Information Technology 1,000 3 6 190,000 Each service department supervisor should prepare a cost allocation of their costs to other units, using both a direct and a step allocation approach. It is agreed that the step allocations would occur in the following order: (a) Maintenance, (b) Food Services, and (c) Information Technology. Each production supervisor should calculate their total costs under both approaches. The team should then discuss the merits of both allocation methods, and see if a consensus can be reached. Discuss whether the amount of cost allocation varies between the two approaches, and if this influences the debate about which method should be used....
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This note was uploaded on 02/29/2012 for the course ACCOUNTING 101 taught by Professor Hudack during the Spring '11 term at FIU.
- Spring '11