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B and C Please BluStar Company has two service departments, Administration and Accounting, and two operating departments, Domestic and International. Administration costs are allocated on
B and C Please
BluStar Company has two service departments, Administration and Accounting, and two operating departments, Domestic and International. Administration costs are allocated on the basis of employees, and Accounting costs are allocated on the basis of number of transactions. A summary of BluStar operations follows. Administration Accounting 26 Employees Transactions Department direct costs Domestic 49 18,000 $935,000 International 25 72,000 $3,740,000 37,000 $352,000 $141,000 Required: a. Allocate the cost of the service departments to the operating departments using the direct method. b. Allocate the cost of the service departments to the operating departments using the step method. Start with Administration. c. Allocate the cost of the service departments to the operating departments using the reciprocal method. Complete this question by entering your answers in the tabs below. Required A Required B Required C Allocate the cost of the service departments to the operating departments using the step method. Start with Administration. (Do not round Intermediate calculations. Negative amounts should be indicated by a minus sign.) From Department costs Administration allocation Accounting allocation Total cost Administration $ 352,000 (352,000) Accounting $ 141,000 95,520 Domestic $ 935,000 172,480 International $ 3,740,000 88,000 $ 0 $ 236,520 $ 1,107,480 $ 3,828,000 Required A Required C >Step by Step Solution
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