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1. Okanagan College has provided the following data to be used in its service department cost allocations: Service Departments Operating Department Administration Physical Plant Services
1. Okanagan College has provided the following data to be used in its service department cost allocations: Service Departments Operating Department Administration Physical Plant Services Undergraduate Programs Graduate Programs Departmental costs before allocations $1,500,000 $654,000 $32,650,000 $1,890,000 Student credit-hours 10.000 10,000 Space occupied in square metres 2,500 750 25,000 3,000 Required: Using the direct method, allocate the costs of the service departments to the two operating departments. Allocate the costs of the Administration Department based on student credit-hours and the costs of the Physical Plant Services Department based on space occupied. 2. Arbon Company has three service departments and two operating departments. Selected data concerning the five departments are presented below: Service Department Operating Departments Administrative Janitorial Equipment Maintenance Prep Finishing Total Costs $84,000 $67,800 $36,000 $256,100 $498,600 $942,500 Number of employees 80 60 240 600 300 1,280 Square metres of space occupied 300 1,200 1,00 2,000 7,000 11,500 Machine-hours 10,000 30,000 40,000 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
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