Vitro Corporation has two service departments, Service Department A and Service Department B, and two operating departments, Operating Department X and Operating Department Y. Service Department Operating Department Service Department AService Department BOperating Department XOperating Department Y Departmental costs$ 31,280$ 55,640$ 161,490$ 399,350 Allocation base A4,0001,00026,00019,000 Allocation base B6,0002,00030,0002,000.
The company uses the step-down method to allocate service department costs to operating departments. 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.
Required:
Allocate the service department costs to the operating departments using the step-down method.