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

Multiple Choice

Clopton 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 IT costs are allocated second on the basis of PCs.
-In the first step of the allocation, the amount of Personnel Department cost allocated to the Family Medicine Department is closest to:

A) $20,285
B) $17,929
C) $18,560
D) $39,774