Goodland Corporation uses the step-down method to allocate service department co

Question

Goodland 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 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. In the first step of the allocation, the amount of Service Department A cost allocated to the Operating Department X is closest to: $9,760 $20,608 $19,800 $18,032

Explanation / Answer

$19,800

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