Buildz Corp has been servicing the Production Casting Department ...

[Lisaclaire]

Question 1

Under the step-down method, once a support department's costs have been allocated, all subsequent support-department costs are allocated back to it.
◦ true
◦ false

Question 2

Buildz Corp has been servicing the Production Casting Department for five years. Beginning next year, the company is adding a Production Molding Department to compliment the materials produced by the Production Casting Department. As a result, data center costs are expected to increase from $800,000 per year to $1,000,000 per year. The Production Molding Department will use 20% of the data center efforts. 

Required:
a.  Using the stand-alone cost-allocation method, identify the amount of data center cost that will be allocated to Production Casting and the Production Molding Department next year. 

b.  Using the incremental cost-allocation method, identify the amount of data center cost that will be allocated to Production Casting and the Production Molding Department next year.

[Carliemb17]

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[Lisaclaire]

Thanks for the timely response, appreciate it

[dantucker]

Gracias!