Muckenfuss Clinic Uses the Step-Down Method to Allocate Service Department

Multiple Choice

Muckenfuss Clinic uses the step-down method to allocate service department costs to operating departments. The clinic has two service departments, Personnel and Information Technology (IT) , and two operating departments, Family Medicine and Geriatric Medicine. Data concerning those departments follow: Personnel costs are allocated first on the basis of employees and Information Technology costs are allocated second on the basis of Personnel costs.In the first step of the allocation, the amount of Personnel Department cost allocated to the Family Medicine Department is closest to:

A) $23,920
B) $58,405
C) $23,049
D) $26,366