Strzelecki Corporation uses the step-down method to allocate service department costs to operating departments. The company has two service departments, Service Department A and Service Department B, and two operating departments, Operating Department X and Operating Department Y. Data concerning those departments follow: Service DepartmentsOperating Departments Service Department AService Department BOperating Department XOperating Department YDepartmental costs$37,800$45,780$247,360$304,330Allocation base A 5,000 1,000 29,000 15,000Allocation base B 5,000 2,000 39,000 3,000 Service Department A costs are allocated first on the basis of allocation base A and Service Department B costs are allocated second on the basis of allocation base B. The total Operating Department Y
cost after allocations is closest to:
A. $320,260
B. $318,473
C. $307,660
D. $320,486
Answer: A
Business
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