Muckenfuss Clinic uses the step-down method to allocate service department costs to operating departments. The clinic has two service departments, Personnel and Information Technology (IT), and two operating departments, Family Medicine and Geriatric Medicine. Data concerning those departments follow: Service Department Operating Department Family Medicine Information Personnel Technology $ 28,600 Geriatric Medicine $ 38,478 Departmental costs Employees Personnel costs $ 329,110 $ 146,510 21 50 100 213 22 51 76 152 Personnel costs are allocated first on the basis of employees and Information Technology costs are allocated second on the basis of Personnel costs. In the first step of the allocation, the amount of Personnel Department cost allocated to the Family Medicine Department is closest to: Multiple Choice $9,704 $12,196 < Prev 7 of 10 Next > ENG
Muckenfuss Clinic uses the step-down method to allocate service department costs to operating departments. The clinic has two service departments, Personnel and Information Technology (IT), and two operating departments, Family Medicine and Geriatric Medicine. Data concerning those departments follow: Service Department Operating Department Family Medicine Information Personnel Technology $ 28,600 Geriatric Medicine $ 38,478 Departmental costs Employees Personnel costs $ 329,110 $ 146,510 21 50 100 213 22 51 76 152 Personnel costs are allocated first on the basis of employees and Information Technology costs are allocated second on the basis of Personnel costs. In the first step of the allocation, the amount of Personnel Department cost allocated to the Family Medicine Department is closest to: Multiple Choice $9,704 $12,196 < Prev 7 of 10 Next > ENG
Chapter1: Financial Statements And Business Decisions
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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