Question
In: Accounting
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 order:
Administrative (number of employees), Janitorial (space occupied),
and Equipment Maintenance (machine-hours).
Required:
Using the step-down method, allocate the service department costs
to the operating departments. (Negative amounts should be
indicated by a minus sign.)
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 order:
Administrative (number of employees), Janitorial (space occupied),
and Equipment Maintenance (machine-hours).
Required:
Using the step-down method, allocate the service department costs
to the operating departments. (Negative amounts should be
indicated by a minus sign.)
|
|||||||||||||||||||||||||||||||||||||||||||||||||||
Solutions
Expert Solution
- Requirement asked
|
Service Departments |
Operating Departments |
|||||
|
Administrative |
Janitorial |
Maintenance |
Prep |
Finishing |
Total |
|
|
Departmental costs before allocations |
$92,000 |
$67,800 |
$36,000 |
$256,100 |
$498,600 |
$950,500 |
|
Allocations: |
||||||
|
Administrative (60+ 240 + 600 + 300= 1200) |
($92,000) |
$4,600 |
$18,400 |
$46,000 |
$23,000 |
$0 |
|
Janitorial (1000 + 2000 + 7000 = 10000) |
($72,400) |
$7,240 |
$14,480 |
$50,680 |
$0 |
|
|
Maintenance (26000 + 54000 = 80000) |
($61,640) |
$20,033 |
$41,607 |
$0 |
||
|
Total costs after allocation |
$0 |
$0 |
$0 |
$336,613 |
$613,887 |
$950,500 |
--Working
|
Service Departments |
Operating Departments |
||||
|
Administrative |
Janitorial |
Maintenance |
Prep |
Finishing |
|
|
Departmental costs before allocations |
92000 |
67800 |
36000 |
256100 |
498600 |
|
Allocations: |
|||||
|
Administrative (60+ 240 + 600 + 300= 1200) |
-92000 |
=92000*60/1200 |
=92000*240/1200 |
=92000*600/1200 |
=92000*300/1200 |
|
Janitorial (1000 + 2000 + 7000 = 10000) |
=-67800-4600 |
=72400*1000/10000 |
=72400*2000/10000 |
=72400*7000/10000 |
|
|
Maintenance (26000 + 54000 = 80000) |
=-36000-18400-7240 |
=61640*26000/80000 |
=61640*54000/80000 |
||
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
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Operating Departments
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Janitorial
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$44,000
$245,000
$545,000
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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
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The company allocates service department costs by the step-down
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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
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the five departments follow:
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Administrative
Janitorial
Maintenance
Binding
Printing
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$93,300
$66,200
$44,800
$248,300
$490,600
$943,200
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60
90
260
630
320
1,360
Square feet of space occupied
3,100
11,800
8,800
10,400
68,900
103,000
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28,200
37,800
Required:
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Woodbury Hospital has three service departments and three operating departments. Estimated cost and operating data for...
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Food Services
Administrative Services
Laboratory
Radiology
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$341,060
$289,020
$455,900
$600,500
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6,000
3,000
80,000
91,800
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7,000
19,000
10,500
16,000
9,500
128,000
190,000
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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
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Operating Departments
Housekeeping Services
Food Services
Administrative Services
Laboratory
Radiology
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Total
Total cost
$93,000
$313,060
$261,020
$420,900
$544,500
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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
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10,000
31,000
58,000
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Woodbury Hospital has three service departments and three operating departments. Estimated cost and operating data for...
Woodbury Hospital has three service departments and three
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departments in the hospital for the forthcoming quarter are
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Operating Departments
Housekeeping Services
Food Services
Administrative Services
Laboratory
Radiology
General Hospital
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$285,020
$450,900
$592,500
$538,800
$2,309,280
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2,600
5,600
2,800
78,800
89,800
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18,400
10,100
15,400
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126,000
186,000
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16,000
43,000
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Andy Corp. has two service departments and two operating
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for these departments for last year are as follows: Service
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costs are allocated first on the basis of number of employees and
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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
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BluStar Company has two service departments, Administration and Accounting, and two operating departments, Domestic and International....
BluStar Company has two service departments, Administration and
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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.
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Accounting
Domestic
International
Employees
–
21
46
33
Transactions
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–
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:
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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
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Administration
Accounting
Domestic
International
Employees
—
25
15
60
Transactions
50,000
—
10,000
40,000
Department direct costs
$
58,000
$
24,500
$
159,750
$
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