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.The total Geriatric Medicine Department cost after allocations is closest to:

A) $165,264
B) $188,449
C) $207,995
D) $207,988