Arbon Company has three service departments and two operating departments. Selected data concerning the five...
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Accounting
Arbon Company has three service departments and two operating departments. Selected data concerning the five departments are presented below:
Service Departments Operating Departments Equipment Maintenance $47,000 Total Janitorial $76,800 60 Administrative Prep Finishing Costs Number of employees Square metres of space $111,000 80 $283,100 $507,600 $1,025,500 240 1,200 700 2,000 11,000 300 8,000 36,000 1,380 13,100 47,000 500 1,400 occupied Machine-hours The company allocates service department costs by the step-down method in the following order: Administrative (number of employees), Janitorial (space occupied), and Equipment Maintenance (machine- hours) Required: Assuming that the company uses the direct method rather than the step-down method to allocate service department costs, how much overhead cost would be assigned to each operating department? (Negative amounts should be indicated by a minus sign.) Service Departments Operating Departments Equipment Maintenance Administrative Janitorial Prep Finishing Total Departmental costs before allocations Allocations: Administrative Janitorial Equipment maintenance Total costs after allocation
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