Job order and process systems are discussed in

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Unformatted text preview: •••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• Allocating Administration Costs at Lawncare, Inc. We have not yet allocated the costs of the Administration cost center to the remaining cost centers. Doing so will allow us to demonstrate how the stepdown method works. As with the Maintenance center, the first step in allocating the Administration center’s costs is to choose an allocation basis. There are several alternative bases that we might use, such as number of personnel or salary dollars. Assume the company decides to use salary dollars, presumably reasoning that there is a causal relationship between increases in salary dollars in a given cost center and increases in the use of the administration resource by that cost center. Also assume that the following information is available to us: ____________________________________________________...
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This document was uploaded on 03/30/2014.

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