(Algebraic method) Leyh Press has two service departments (administration and editorial) and two revenue-producing divisions (college textbooks and professional publications). Following are the direct costs and allocation bases for each of these areas:

Company management has decided to allocate administration and editorial costs using dollars of assets employed and number of employees, respec¬ tively. Use the algebraic method to allocate the service department costs and determine the total operating costs of college textbooks and professional publications. LO.1

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Department Administration Editorial College textbooks Professional publications ALLOCATION BASES Direct Costs Dollars of Assets Employed $ 450,000 Number of Employees 350,000 2,250,000 950,000 $ 620,000 10,000 1,200,000 1,050,000 10 588 50 30