Question
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
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 $ 101,000 $ 67,800 $ 36,000 $ 256,100 $ 498,600 $ 959,500 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 44,000 66,000 110,000 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 $ 101,000 $ 67,800 $ 36,000 $ 256,100 $ 498,600 $ 959,500 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 44,000 66,000 110,000 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.)
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