|Chapter 12 Decision guidelines
Cost allocations from service departments to
Direct cost# employeesdirect labor hrssq foot cleaned
Create an Excel spreadsheet to allocate costs using the direct method and the step down method. Use the results to answer questions about your findings.
1. What are the total costs for the the direct method? What are the total costs for the the direct method?
2. What are the total costs for the Residential department using the step-down method?
3. What are the total costs for the Commercial department using the step-down method?
4. Which method would you recommend that to allocate their service departments costs to their producing departments? Why?
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