Question
In: Accounting
The Ferre Publishing Company has three service departments and two operating departments. Selected data from a...
The Ferre Publishing Company has three service departments and two operating departments. Selected data from a recent period on the five departments follow:
|
Service Departments |
Operating Departments |
||||||
| Administration | Janitorial | Maintenance | Binding | Printing | Total | ||
| Costs | $72,000 | $73,000 | $44,000 | $245,000 | $545,000 | $979,000 | |
| Number of employees | 112 | 80 | 320 | 800 | 400 | 1,712 | |
| Square feet of space occupied | 3,000 | 12,000 | 10,000 | 20,000 | 70,000 | 115,000 | |
| Hours of press time | 18,000 | 37,000 | 55,000 | ||||
The company allocates service department costs by the step-down method in the following order: Administration (number of employees), Janitorial (space occupied), and Maintenance (hours of press time).
Required:
Using the step-down method, allocate the service department costs to the operating departments. (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. Round your answers to the nearest whole dollar amount.)
Solutions
Expert Solution
- All working forms part of the answer
- Working: % ratios to be used for allocation
|
Administration |
Janitorial |
Maintenance |
Binding |
Printing |
Total |
|
|
Number of employees |
80 |
320 |
800 |
400 |
1600 |
|
|
5.00% |
20.00% |
50.00% |
25.00% |
100.00% |
||
|
Square feet of space occupied |
10,000 |
20,000 |
70,000 |
100000 |
||
|
10.00% |
20.00% |
70.00% |
100.00% |
|||
|
Hours of press time |
18,000 |
37,000 |
55000 |
|||
|
32.73% |
67.27% |
100.00% |
- Final Allocation: Step Down
|
Department |
|||||
|
Administration |
Janitorial |
Maintenance |
Binding |
Printing |
|
|
Direct Cost |
$ 72,000 |
$ 73,000 |
$ 44,000 |
$ 245,000 |
$ 545,000 |
|
Step Down Allocation: |
|||||
|
Administration |
$ (72,000) |
$ 3,600 |
$ 14,400 |
$ 36,000 |
$ 18,000 |
|
Janitorial |
$ (76,600) |
$ 7,660 |
$ 15,320 |
$ 53,620 |
|
|
Maintenance |
$ - |
$ - |
$ (66,060) |
$ 21,620 |
$ 44,440 |
|
Total Cost after allocation |
$ - |
$ - |
$ - |
$ 317,940 |
$ 661,060 |
ekkarill92 answered 2 years agoRelated Solutions
The Ferre Publishing Company has three service departments and two operating departments. Selected data from a...
The Ferre Publishing Company has three service departments and
two operating departments. Selected data from a recent period on
the five departments follow:
Service Departments
Operating
Departments
Administrative
Janitorial
Maintenance
Binding
Printing
Total
Costs
$93,300
$66,200
$44,800
$248,300
$490,600
$943,200
Number of employees
60
90
260
630
320
1,360
Square feet of space occupied
3,100
11,800
8,800
10,400
68,900
103,000
Hours of press time
9,600
28,200
37,800
Required:
Assuming that the company uses the direct method rather than the
step-down...
Arbon Company has three service departments and two operating departments. Selected data concerning the five departments...
Arbon Company has three service departments and two operating
departments. Selected data concerning the five departments are
presented below:
Service Departments
Operating Departments
Administrative
Janitorial
Equipment
Maintenance
Prep
Finishing
Total
Costs
$
92,000
$
67,800
$
36,000
$
256,100
$
498,600
$
950,500
Number of employees
80
60
240
600
300
1,280
Square metres of space occupied
300
1,200
1,000
2,000
7,000
11,500
Machine-hours
26,000
54,000
80,000
The company allocates service
department costs by the step-down method in the following...
Woodbury Hospital has three service departments and three operating departments. Estimated cost and operating data for...
Woodbury Hospital has three service departments and three
operating departments. Estimated cost and operating data for all
departments in the hospital for the forthcoming quarter are
presented in the table below:
Service Departments
Operating Departments
Housekeeping Services
Food Services
Administrative Services
Laboratory
Radiology
General Hospital
Total
Total cost
$107,000
$341,060
$289,020
$455,900
$600,500
$545,800
$2,339,280
Meals served
2,800
6,000
3,000
80,000
91,800
Square feet of space
7,000
19,000
10,500
16,000
9,500
128,000
190,000
Files processed
24,000
17,000
45,000
86,000
The...
Woodbury Hospital has three service departments and three operating departments. Estimated cost and operating data for...
Woodbury Hospital has three service departments and three
operating departments. Estimated cost and operating data for all
departments in the hospital for the forthcoming quarter are
presented in the table below:
Service Departments
Operating Departments
Housekeeping Services
Food Services
Administrative Services
Laboratory
Radiology
General Hospital
Total
Total cost
$93,000
$313,060
$261,020
$420,900
$544,500
$496,800
$2,129,280
Meals served
1,400
3,200
1,600
71,600
77,800
Square feet of space
5,600
14,800
7,700
11,800
8,100
114,000
162,000
Files processed
17,000
10,000
31,000
58,000
The...
Woodbury Hospital has three service departments and three operating departments. Estimated cost and operating data for...
Woodbury Hospital has three service departments and three
operating departments. Estimated cost and operating data for all
departments in the hospital for the forthcoming quarter are
presented in the table below:
Service Departments
Operating Departments
Housekeeping Services
Food Services
Administrative Services
Laboratory
Radiology
General Hospital
Total
Total cost
$105,000
$337,060
$285,020
$450,900
$592,500
$538,800
$2,309,280
Meals served
2,600
5,600
2,800
78,800
89,800
Square feet of space
6,800
18,400
10,100
15,400
9,300
126,000
186,000
Files processed
23,000
16,000
43,000
82,000
The...
Andy Corp. has two service departments and two operating departments. The company allocates service departmental costs...
Andy Corp. has two service departments and two operating
departments. The company allocates service departmental costs to
operating departments using the step-down method. Operating data
for these departments for last year are as follows: Service
Departments Operating Departments Personnel Maintenance Assembly
Machining Departmental costs $144,000 $84,000 $12,000 $34,000
Number of employees 35 30 90 60 Machine-hours 0 0 330 170 Personnel
costs are allocated first on the basis of number of employees and
Maintenance costs are allocated second on the...
Andy Corp. has two service departments and two operating departments. The company allocates service departmental costs...
Andy Corp. has two service departments and two operating
departments. The company allocates service departmental costs to
operating departments using the step-down method. Operating data
for these departments for last year are as follows:
Service Departments
Operating Departments
Personnel
Maintenance
Assembly
Machining
Departmental costs
$144,000
$84,000
$12,000
$34,000
Number of employees
35
30
90
60
Machine-hours
0
0
210
290
Personnel costs are allocated first on the basis of number of
employees and Maintenance costs are allocated second on the...
BluStar Company has two service departments, Administration and Accounting, and two operating departments, Domestic and International....
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.
Administration
Accounting
Domestic
International
Employees
–
21
46
33
Transactions
35,000
–
18,000
72,000
Department
direct costs
$
361,000
$
142,000
$
950,000
$
3,680,000
Required:
a. Allocate the cost of the service departments
to the operating...
BluStar Company has two service departments, Administration and Accounting, and two operating departments, Domestic and International....
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:
Administration Accounting Domestic International Employees – 28 36
36 Transactions 38,000 – 20,000 80,000 Department direct costs $
363,000 $ 141,000 $ 955,000 $ 3,750,000
Allocate the cost of the service departments to the operating
departments using...
BluStar Company has two service departments, Administration and Accounting, and two operating departments, Domestic and International....
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.
Administration
Accounting
Domestic
International
Employees
—
25
15
60
Transactions
50,000
—
10,000
40,000
Department direct costs
$
58,000
$
24,500
$
159,750
$
597,000
BluStar estimates that the cost structure in its operations is as
follows....
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