BluStar Company has two service departments, Administration and Accounting, and two operating departments, Domestic and...
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Accounting
BluStar Company has two service departments, Administration and Accounting, and two operating departments, Domestic and International. Administration costs are allocated on the basis of employees, and Accounting costs are allocated on the basis of number of transactions. A summary of BluStar operations follows.
AdministrationAccountingDomesticInternationalEmployees:-274726
Transactions:32,000-20,00080,000
Department direct costs: $364,000$140,000$940,000$3,580,000
c.Allocate the cost of the service departments to the operating departments using the reciprocal method.
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