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Author Question: Buildz Corp has been servicing the Production Casting Department for five years. Beginning next ... (Read 31 times)

Lisaclaire

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on: Mar 6, 2021

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.
Horngren's Cost Accounting: A Managerial Emphasis ¦ Datar, Rajan ¦ 16th Edition
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Marked as best answer by Lisaclaire on Mar 6, 2021

Carliemb17

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Reply #1 on: Mar 6, 2021
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Lisaclaire

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Reply 2 on: Mar 6, 2021
Wow, this really help

xthemafja

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Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

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