Cost Allocations (computer required): Save the Students, Inc., is an international foundation organized to help students survive final exams through study support, tutorial services, and around-the-clock food and coffee services. These student services are viewed as production depart- ments for cost allocation purposes. The foundation needs to determine the costs of each service to provide information for its new fund-raising drive. The manager of the foundation believes that the service costs should include not only the direct costs of services but the costs of the necessary supporting activities. The foundation has an administration, fund raising, and communications network which acts as service departments. These service departments provide services to each other as well as to the "producing" departments.

A schedule of the direct costs of each activity together with relevant information for allocation purposes gives the following information:

Administration costs are allocated based on labor-hours. Fund raising costs are allocated based on the direct costs of each department. Communications costs are incurred to support office personnel in each department, so the office salaries are used for allocation of those costs.

Required: What are the costs of each of the student support services provided by STSF using the simultaneous solution method for allocation of service department costs?

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Item Direct costs Study Support Tutorial Services Food and Coffee $2,480,000 $1,525,000 Service usage: Labor-hours 38,400 52,600 Office salaries 2,210 3,150 $2,090,700 21,960 1,130 Fund Item Administration Raising Direct costs $576,100 $1,421,400 Service usage: Labor-hours 17,300 Office salaries 6,440 38,750 2,970 1,860 Communications $285,100 5,840