The accountant for Sam Inc. is preparing the budgetsfor operating department support service costs.Maintenance costs are allocated based on square feet,and cafeteria costs are allocated based on number ofemployees. The following data have been collected:Support Departments Operating DepartmentsMaintenance Cafeteria Cutting Packaging Direct costs $50,000 $45,000 $275,000 $300,000 Number ofemployees 15 10 150 250 Square feet1,500 2,000 3,500 4,000 If the step-down method isused and maintenance is allocated first, the total costallocated to the cutting department will be $55,757 $39,243 $20,822 $40,208. I need help withexplanation. Thanks!

Step 1: Introduction to step Allocation methodThe step-down method, also known as the sequential or…

Answered: The accountant for Sam Inc. is…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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