Dainels Corporation Uses the Step-Down Method to Allocate Service Department

Multiple Choice

Dainels Corporation uses the step-down method to allocate service department costs to operating departments. The company has two service departments, General Management and Physical Plant, and two operating departments, Sales and After-Sales. Data concerning those departments follow: General Management Department costs are allocated first on the basis of employee time and Physical Plant Department costs are allocated second on the basis of space occupied. The total After-Sales Department cost after allocations is closest to:

A) $516,196
B) $515,880
C) $503,980
D) $513,911