Madison Park Co-op, a whole foods grocery and gift shop, has provided the following data to...

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Accounting

Madison Park Co-op, a whole foods grocery and gift shop, hasprovided the following data to be used in its service departmentcost allocations: Service Departments Operating DepartmentsAdministration Janitorial Groceries Gifts Departmental costs beforeallocations $210,000 $60,000 $3,900,000 $350,000 Employee-hours 490300 2,750 150 Space occupied—square feet 800 1,300 9,400 600Required: Using the step-down method, allocate the costs of theservice departments to the two operating departments. AllocateAdministration first on the basis of employee-hours and thenJanitorial on the basis of space occupied. (Please enterallocations from a department as negative and allocations to adepartment as positive. The line should add across to zero. Do notround intermediate calculations. Round your answers to the nearestwhole dollar amount.)

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3.7 Ratings (622 Votes)

In the step down method the costs are also allocated to other service departments The total cost of the other service department increases by the allocation and then this increased is allocated We start See Answer

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