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Verdich [7]
3 years ago
5

Consider the following statements about the step-down method of service department cost allocation: I. Under the step-down metho

d, all service department costs are eventually allocated to production departments. II. The order in which service department costs are allocated is important. III. After a service department's costs have been allocated to other departments, no costs are re-circulated back to that service department. Which of the above statements is (are) correct?
a. I, II, and III.
b. I only.
c. I and II.
d. II only.
e. I and III.
Business
1 answer:
WINSTONCH [101]3 years ago
8 0

Answer:

The correct statements under the step-down method are:

a. I, II, and III.

Explanation:

The step-down method of allocating the costs of service departments is one of the three methods in use.  The others include the direct method and the reciprocal method.  With the direct method, service departments' costs are directly allocated to the production departments without any allocation to a service department.  The reciprocal method is much more involved, using formulas and calculations.  The step-down method allocates the service departments' costs to all the other service and production departments, except itself.  This step is eventually followed until all the service departments' costs have been allocated to the production departments.

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ehidna [41]

Solution :

QBI           300000        W-2 wages      40000

Taxable    3814000      QBP                 10000

income

                                      W-2 limit

Phase                           greater of

out MFJ

Start          315000      50% of W-2       20000

Finish        415000    or 25% of W-2     10250

                                  + 2.5% of QBP

                                  Selected             20000     Being higher      As part 1

Taxable income above phase out

$\frac{381,400-315000}{100000}$        66%

Now applying gross deduction and phase out

Gross deduction        Being 20% of QBI      = 66000

Less : wage limit of QBI                                 - 20000

Phase out %                                                     x 66%

Phase out amount                                           30,360

Final deduction = gross deduction- phase out amount

                         = 66,000 - 30,360

                         = 35,640

8 0
2 years ago
An increase in supply is illustrated by a supply curve sifting to the right
solniwko [45]

Answer:

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7 0
3 years ago
After graduating from college, Yunis, age 22, started working for his parent's real estate business as an unpaid assistant. He w
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Answer:

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3 0
3 years ago
Natalie operates on a pretty tight budget. She is a price-conscious shopper and usually buys store or generic brands to save mon
Llana [10]

Answer: The income effect

Explanation: The income effect refers to the effect on the purchasing power of the consumer when his or her income level changes.

In the given case, Natalie was price conscious  and used to buy lower priced goods with the objective of saving money. When her income rises she starts buying expensive goods as her purchasing power increases with increase in income.

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Gemiola [76]
Vocational classes provide job focus training for specific roles or careers
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