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BluStar Company has two service departments, Administration and Accounting, and two operating departments, Domestic and International . Administration costs are allocated on the basis of

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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 Domestic International Employees 23 53 24 Transactions 39,000 18,000 72,000 Department direct costs $364,000 $144,000 $950,000 $3,610,080 Required: a. Allocate the cost of the service departments to the operating departments using the direct method. (Do not round Intermediate calculations. Negative amounts should be indicated by a minus sign.) To Administration Accounting Domestic International From Department costs Administration allocation Accounting allocation Totals $ 0 $ 0 $ 0 S b. 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 To Administration Accounting Domestic International $ 354,000 $ 144.000 $ 950,000 $3,610,000 B3,720 192.920 87,360 of 122772011 b. 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 allocated Administration Accounting Domestic International $ 364,000 $ 144,000 $ 950,000 $3,610,000 (364.000) 83.720 192,920 87,360 0 (227.720) $ 0 $ 0 $ 1,142,920 5 3,697,360 c. Allocate the cost of the service departments to the operating departments using the reciprocal method. (Do not round intermediate calculations. Negative amounts should be indicated by a minus sign.) To Administration Accounting $ 364.000$ 144,000 Domestic International 950,000 $3,610,000 From Department costs Administration allocation Accounting allocation Total cost alocated $ 364,000 5 144,000 $ 950,000 $3,610,000

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