Chapter 19, Problem 2CMA

Adam Corporation manufactures computer tables and has the following budgeted indirect manufacturing cost information for the next year:

If Adam uses the step-down (sequential) method, beginning with the Maintenance Department, to allocate support department costs to production departments, the total overhead (rounded to the nearest dollar) for the Machining Department to allocate to its products would be:

1. a. $407,500.
2. b. $422,750.
3. c. $442,053.
4. d. $445,000.