Service Department Allocations Quick Test

After you have answered all 25 questions, click "Grade This Quick Test" at the bottom of the page to view your grade and receive feedback on your answers.

Note: Some of the following test questions may not have been covered in the Explanation or Practice Quiz for this topic. For more insight regarding a specific question, use the search box at the top of the page.

1. Service departments are likely to be __________ centers.
2. Service departments refer to __________ departments.
3. Service department costs are likely to be part of __________.
4. The allocated costs of service departments will be __________ costs to the production departments.
5. The factory’s maintenance department is an example of a __________ department.
6. The maintenance department’s wages will be __________ cost of the maintenance department.
7. The maintenance department’s wages will be __________ cost of the production departments.
8. The maintenance department’s wages will be __________ product cost.
9. The costs of the factory cafeteria will likely be allocated to other departments based on the other factory departments’ __________.
For each of the items 10 - 19, select one of the following three methods for allocating service or support department costs:

Direct Method
Step Method
Reciprocal Method
10. The least precise method of the three methods listed.
11. This method uses simultaneous equations.
12. Under this method, the order or sequence in which the service department costs are allocated is important.
13. No allocation is ever made to another service department.
14. Considers the relationships with all service departments and production departments.
15. Ignores all activities between service departments.
16. Is the most sophisticated and precise method of the three methods listed.
17. Under this method, the allocations begin with the service department that serves the greatest number of other service departments, or with the service department with the highest amount of costs.
18. This method always recognizes work or services done between all service departments.
19. Under this method, some but not all service departments will be allocated to another service department’s costs.
Use the following information for answering Questions 20 - 25:
20. Under the direct method, the amount of the Maintenance service department (S1) costs that are allocated to the production department P1 is $__________.
21. Under the direct method, the production department P1 will be assigned a total of $__________ from the three service departments.
22. Under the direct method, the production department P2 will be assigned a total of $__________ from the three service departments.
23. Assume the step method is used to allocate the service department costs in the following order: S1, S2, S3. The amounts allocated to the other departments from S1 will be:
S2: __________
S3: __________
P1: __________
P2: __________
24. Assume the step method is used to allocate the service department costs in the following order: S1, S2, S3. The amounts allocated to the other departments from S2 will be:
S1: __________ ($0, $27,000, $42,000)
S3: __________ ($21,000, $26,118, $42,000)
P1: __________ ($63,000, $72,000, $84,000, $91,412)
P2: __________ ($63,000, $72,000, $104,470, $167,470)
25. Assume the step method is used to allocate the service department costs in the following order: S1, S2, S3. After all of the allocations have been made, the total amounts of service department costs that will be assigned to the production departments are:
P1: __________ ($195,000, $235,000, $270,750)
P2: __________ ($151,000, $199,250, $235,000)

Any questions left unanswered will be marked incorrect.

Service Department Allocations(Quick Test)

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