Yamane Corporation, a manufacturer, uses the step-down method to allocate service department costs to operating departments. The company has two service departments, Administration and Facilities, and two operating departments, Assembly and Finishing. Data concerning those departments follow: Service DepartmentsOperating Departments AdministrationFacilitiesAssemblyFinishingDepartmental costs$22,620$67,440$105,520$427,780Labor hours 3,000 2,000 21,000 16,000Space occupied 7,000 1,000 32,000 3,000 Administration Department costs are allocated first on the basis of labor hours and Facilities Department costs are allocated second on the basis of space occupied. In the first step of the allocation, the amount of Administration Department cost allocated to the Assembly Department
is closest to:
A. $12,838
B. $4,476
C. $11,310
D. $12,180
Answer: D
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