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Use the Direct Method to allocate Service Department Costs to the Operating Departments based on number...

Use the Direct Method to allocate Service Department Costs to the Operating Departments based on number (percentage) of employees.

Painting Dept = 110 employees

Welding Dept = 135 employees

Service Dept. Maintenance

Service Dept. Cafeteria

Service Dept. Custodial

Operating Dept. Painting

Operating Dept. Welding

Dept costs before allocation

$200,000

110,000

275,000

500,000

850,000

Maintenance

Cafeteria

Custodial

Total after allocation

Use the Step-Down Method to allocate Service Department costs to the Operating Departments based on the number (percentage) of employees.

Cafeteria Dept = 30 employees

Custodial Dept = 25 employees

Painting Dept = 110 employees

Welding Dept = 135 employees

Service Dept. Maintenance

Service Dept. Cafeteria

Service Dept. Custodial

Operating Dept. Painting

Operating Dept. Welding

Dept costs before allocation

$200,000

110,000

275,000

500,000

850,000

Maintenance

Cafeteria

Custodial

Total after allocation

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