Question
Arbon company has three service departments and two operating departments. Selected data concerning the five departments are presented below: Service departments operating department administrative janitorial
Arbon company has three service departments and two operating departments. Selected data concerning the five departments are presented below:
Service departments operating department
administrative | janitorial | equipment maintenance | prep | furnishing | total | |
costs | 84,000 | 67,800 | 36,000 | 256,100 | 498,600 | 942,500 |
no.of employees | 80 | 60 | 240 | 600 | 300 | 1,280 |
square meters of space occupied | 300 | 1,200 | 1000 | 2000 | 7,000 | 11,500 |
machine hours | 10,000 | 30,000 | 40,000 |
The company allocate service deparetment cost by direct method: Administrative ( no. of employees), janitorial (space occupied), And equipment maintenance ( machine hours).
Required: Allocat the service department cost to the operating department.
Show your calculation for allocating each service department cost.
Show a breakdown of the final total cost for the two operting departments.
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