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Arbon Company has three service departments and two operating departments. Selected data concerning the five departments are presented below: Service Departments Operating Departments Equipment
Arbon Company has three service departments and two operating departments. Selected data concerning the five departments are presented below: Service Departments Operating Departments Equipment Administrative Janitorial Maintenance Prep Costs Number of employees Square metres of space occupied $98,000 80 300 $67,800 60 1,200 $36,000 240 $256,100 Finishing $498,600 Total $956,500 600 300 1,280 1,000 2,000 7,000 11,500 Machine-hours 38,000 57,000 95,000 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.) Departmental costs before allocations. Allocations: Administrative Janitorial Service Departments Administrative Janitorial Maintenance Operating Departments Prep Finishing Total Maintenance Total costs after allocation $ $ 0 $ 0 $ 0 $ 0
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