For the Month of October, the Accounting and IT Departments

Multiple Choice

For the month of October, the Accounting and IT departments incurred costs of $180,000 and $260,000, respectively. The company uses the step-down method to allocate support costs with the accounting costs being allocated first followed by the IT costs. Costs are being consumed in the following manner: Using the step-down method, how much of the total support activity costs (Accounting and IT) will be allocated to the Fabrication department?

A) $119,000
B) $104,200
C) $97,000
D) $99,900