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...