Finkler Legal Services, LLC, Uses the Step-Down Method to Allocate

Essay

Finkler Legal Services, LLC, uses the step-down method to allocate service department costs to operating departments. The firm has two service departments, Personnel and Information Technology (IT), and two operating departments, Family Law and Corporate Law. 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.
-Hodgin Corporation uses the direct method to allocate its two service department costs to its two operating departments. Data concerning those departments follow:
B.
Required:
Allocate the service department costs to the operating departments using the direct method.
Service Department A costs are allocated on the basis of allocation base A and Service Department B costs are allocated on the basis of allocation base