! Required information The Ferre Publishing Company provided the following data for its three service departments and two operating departments. Service Departments Administration Costs $ 140,000 Number of employees Square feet of space occupied Hours of press time 60 15,000 Janitorial $ 105,000 35 10,000 Maintenance $ 48,000 140 20,000 Operating Departments Binding Printing $ 275,000 $ 430,000 315 210 40,000 100,000 30,000 60,000 Total $ 998,000 760 185,000 90,000 Administration is allocated based on number of employees; Janitorial based on space occupied; and Maintenance based on hours of press time. Required: Assuming the company uses the direct method rather than the step-down method, how much cost would be assigned to each operating department? Note: Please enter allocations from a department as negative and allocations to a department as positive. The line should add across to zero. Do not round intermediate calculations. Departmental costs before allocations Allocations: Administration costs Janitorial costs Maintenance costs Service Departments Administration Janitorial Maintenance $ 140,000 $ 105,000 $ 48,000 $ Total costs after allocations $ 140,000 $ 105,000 $ Operating Departments Binding Printing 275,000 $ Total 430,000 $ 998,000 48,000 $ 275,000 $ 430,000 $ 998,000
! Required information The Ferre Publishing Company provided the following data for its three service departments and two operating departments. Service Departments Administration Costs $ 140,000 Number of employees Square feet of space occupied Hours of press time 60 15,000 Janitorial $ 105,000 35 10,000 Maintenance $ 48,000 140 20,000 Operating Departments Binding Printing $ 275,000 $ 430,000 315 210 40,000 100,000 30,000 60,000 Total $ 998,000 760 185,000 90,000 Administration is allocated based on number of employees; Janitorial based on space occupied; and Maintenance based on hours of press time. Required: Assuming the company uses the direct method rather than the step-down method, how much cost would be assigned to each operating department? Note: Please enter allocations from a department as negative and allocations to a department as positive. The line should add across to zero. Do not round intermediate calculations. Departmental costs before allocations Allocations: Administration costs Janitorial costs Maintenance costs Service Departments Administration Janitorial Maintenance $ 140,000 $ 105,000 $ 48,000 $ Total costs after allocations $ 140,000 $ 105,000 $ Operating Departments Binding Printing 275,000 $ Total 430,000 $ 998,000 48,000 $ 275,000 $ 430,000 $ 998,000
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter7: Allocating Costs Of Support Departments And Joint Products
Section: Chapter Questions
Problem 30E: A company uses charging rates to allocate service department costs to the using departments. The...
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