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

Multiple Choice

Grable 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) $309,430
B) $306,713
C) $293,590
D) $309,883