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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 Administrative
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 $90,000 $67,800 $36,000 $256,100 240 600 Finishing $498,600 Total $948,500 1.280 Costa Number of employees Square metres of space occupied Machine-hours 300 1,200 1,000 2,000 22,000 7,000 44,000 11,500 66,000 The company allocates service department costs by the step-down method in the following order: Administrative (number of employees), Janitorial (space occupled), 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.) Operating Service Departments Service Departments Departments Administrativinitorial Maintenance Prep Finishing Total Departmental costs before allocations Allocations: Administrative Janitorial Maintenance Total costs after allocation
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