Support Cost Allocation using Step Down Method (Cost Accounting Tutorial #37)

[@marisolc2095]

By far the best explanation on this subject. Did not understand the book or my teacher. Thank you so much!

[@mariecrz10]

I wish I had found you at the beginning of this semester, and not the end. Your videos are the missing piece I needed to figure out managerial accounting!

[@monikasan6860]

Hands down. Best explanation on KZbin.

[@calvin864]

bro has the best explanation ever

[@Pleyox]

Thank you for posting this, I don't think one could ask for a more clear and concise explanation of the step method.

[@markvandonsel3143]

This is one of the most informative videos I have ever seen. Thanks.

[@harrisonneider6627]

You're saving me, I have a cost accounting test tuesday. Thank you.

[@Obelus_OG]

This has been a huge help. My CengageNow assignment wants 2 or 3 extra steps, but I know it well enough to take an exam now. Thanks!

[@Obelus_OG]

Notepirate yeah, see there’s all these extra gaps, and I assumed it was because it wanted me to show how much overhead was being subtracted with each step. So when I did that, it told me I had most of it wrong, though the final totals are correct. imgur.com/a/Yzn5q

[@pacocheung92]

Omg, much better than my uni lecturer

[@anthonyjaffee877]

You're videos are excellent. Thanks!!

[@jasonleokk5761]

Great explanation, very clear and good use of example to demonstrate the concept. Thanks !

[@stilettochick89]

This video helped me so much, thank you for sharing this!

[@ksyyync]

thank you! this is a great help to ace my cost accounting exams

[@michelesantilhano4649]

this is completely incredible. Thank you sooooo much. I cannot thank you enough. YOu are life savers. I got it. Thank you Thank you thank you

[@jina_log]

Really nice and easy to understand. Thank you so much for sharing!

[@probablyhyperfixating]

Im at a very braindead moment in the semester and this made things so much easier! I actually feel like i am supposed to be in college again😂 thank you!

[@mahsabayandoriha5989]

the best explanation ever, thx a lot!!

[@lixiaoling102]

Hi, Thanks for your video, it is really clear and awesome! However, I do not understand why we dont allocate the Security @ 7:30? Could you explain again? Thanks

[@lixiaoling102]

Is it because HR doesnt allocate cost to Security...?

[@poketube468]

Thank You, you are saving me a lot of time!

[@psych0analyst]

Omg, you're awesome. I hope this doesn't show up on my CPA exam. But thank you!!

[@psych0analyst]

It wasn't on my test!! Thank god

[@quaqmireful]

+Kristen Bui Wouldn't it be better if it shows up in your CPA exam, as you'd certainly understand it already :D

[@KhanIOM]

Thanks Dave! But why did you use the denominator 680 at 3:30 but used denominator 650 at 7:50??

[@muchachaviaja]

+Aareez Khan Hey, did you find out if that figures are correct? I think that yes, because in the 7:50 there's no need to add that 30 ro 650 as we've already closed that part (so we don't look at it anymore), but I am searching for confirmation..

[@ultiultijanjan7181]

really effective for me .. easy to understand ....

[@kuangtan2004]

thx Dave, just now I had no idea on how to do my assignment... now I had the idea already :D

[@kuangtan2004]

Sure dave. Because of ur KZbin video I survive my Degree 1st year of accounting... I'm now in my 2nd year 2nd semester.it all thank to u. U are my savior

[@deepandasgupta157]

its very easy to understand.... thankyou...

[@dhivya9890]

Thank you so much seriously it helped me a lot

[@NotepirateDave]

Glad it helped!

[@suniaaziz8370]

Hey I have a question! I have studied that the larger cost should be add in the lower cost service department so why did u add security in HR? I think HR should’ve added in security! Please clear the confusion ☺️

[@SkillzKillzBR]

How come at 3:30 you took 30/680 but at 7:50 you took 400/650, with a different denominator?

[@KhanIOM]

+SkillzKillz Did you find the answer? I'm confused!

[@joshuavarghese9514]

The 680 mentioned earlier includes 30 from 'Security' to find out which Support Department is contributing more to the other Support department. I.e, is Security "Supporting" HR more, OR the other way around. The 650 is the allocation base (400+250), we've excluded the 30 now because the whole idea of allocating is to take from 'Support' and give it to 'Revenue' departments. Therefore the cost is now split between 400/650 and 250/650. Hope this was helpful!

[@rogercorcoran512]

Hi Dave, brilliant tutorial just have a quick question. If in your example you had 3 support departments such as HR, security and Admin. How would you decide the order to step down the costs?

[@loripreskitt1779]

Watched it again. I think I understand.....

[@ClassicalMchannel]

thanks a lot for your video. Really clear :)

[@fransiscacecilianiche7210]

thanks a lot.. this is help me so much .. :)

[@ruihua2130]

you're my god!!! you save my life

[@treshnefix]

Very good video! Just a question, how do you determine whether you want to allocated security first then HR or vice versa?

[@abdelrahamanabdalla6546]

Thats perfect man .. Thank you

[@huiin5010]

Can we allocate from HR department to Security, retail and restaurant first. Then we allocate Security to retail and restaurant?

[@tsatsiletsoara9737]

nice one bruh 👌👐

[@fionaliu9299]

this video helped a lot! thanks xD

[@tumuatlatasi3271]

Thank you for the video.

[@toddgaetke324]

Our instructor had told us that you always allocate from support to revenue using the support dept. with highest OH costs and your video shows otherwise. Which is correct?

[@welele9010]

Does the same logic apply when there are three or more support departments?

[@CodyAlstonLee]

This is awesome!

[@ruihua2130]

hello, if there are three support departments what can i do at first step.

[@loripreskitt1779]

At 8:39, why is denominator 650 instead of 680? It has all clicked up until this point. Before...security to h.r- 2/22......security to retail- 15/22.....Added in the 2 security employees from HR. I may just be doomed. Thanks for posting the video though.

[@joshuavarghese9514]

The 680 mentioned earlier includes 30 from 'Security' to find out which Support Department is contributing more to the other Support department. I.e, is Security "Supporting" HR more, OR the other way around. The 650 is the allocation base (400+250), we've excluded the 30 now because the whole idea of allocating is to take from 'Support' and give it to 'Revenue' departments. Therefore the cost is now split between 400/650 and 250/650. Hope this was helpful!

[@loripreskitt1779]

Thank you!

[@sagnikbaksi8882]

this was awesome, if i have any practice exam questions can i please ask them here? my dad is in the hospital and i cannot afford any payments for learning right now thanks

[@sagnikbaksi8882]

ok i just put one , i appreciate the understanding

[@niklaswilhelmruther7105]

sorry, but shouldnt u add the costs of HR to the costs of the security departement for the new base? i think u did it the other way around in the video and added the lower departments costs to the ones of the bigger departments costs -> security to HR, which is wrong isn't it? thanks in advance for an answer

[@niklaswilhelmruther7105]

***** thanks dave, i now get it!! :)

[@kevinmmathew3453]

Thank you Sir

[@Lwurzy]

Wow Straght nd forward thnx man...

[@ThePedram009]

Does the Step Down method increase the overall cost in comparison to the direct method?

[@myrtlemoseley6402]

Can someone tell me what happened to the $6441 allocated from HR?

[@lutzmayer6861]

He was only looking for the department with higher allocation. 6441 lower so not relevant

[@hemendragupta10]

Video is good but just need to ask that the total cost of support of each department is not tallying for instance Security total cost is 92000 but the amount finally allocated is 62727 to retail and 20909 to restaurant which do not add to 92000 possibly because some cost is allocated to its own department but I suppose that also should be allocated to service department finally

[@6XxDJxX9]

There's something I don't quite get. How come the 50 of HR hours isn't included in the denominator when dividing, it kind of makes sense to me since the 50 HRs are within the $146000 cost. Can you do 30/(30+50+400+250)=0.04,------, 400/730=0.55, 250/730=0.34, then do the percentage 0.04/(0.04+0.55+0.34),-------, 0.55/0.96, 0.34/0.96. Then you times the HR department cost of $146000.

[@6XxDJxX9]

Nevermind.... I tried my way and calculated it. They both have the same percentage but mine requires more steps which is stupid I guess. But hey it works!

[@rhealagbo8160]

that "400/650" and "250/650", why did u divide it by 650 in the hr department to retail and restaurant? i thought you disregard hr department so it means "50" under hr must also be disregarded? someone help me pls. :))))

[@gozdavid9671]

+Rhea Lagbo yes 50 under hr also will be disregarded. cause you are allocating service departments not revenue

[@outbackfrank632]

This is incorrect, you should have started with the HR department since it was larger than the Security dept.

[@eg12p34]

Thanks mate. :)

[@yuxinluo8075]

Sir. how to rank it when there are three support departments ?

[@quaqmireful]

+yuxin Luo You'd have to go back to the concept of which support dept provides the 'greatest service (in terms of cost)' as compared to the other two support dept.

[@gabrielshetterley9663]

While I find this video, and the prior one (#32), very helpful, since the clarity of my professor is a clear a mug, I would if it more helpful if you showed all the work on the screen. I feel there are is still some math being done that is "just assumed."

[@vin7281]

Thank you

[@iamaseemaggarwal]

bruh, too good!

[@meh-hair-Vaughn]

If I could, I would buy you a new car (even though I have never owned a car)

[@bubs7727]

This is reciprocal, not step down lol