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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,

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 27 52 21
Transactions 34,000 21,000 84,000
Department direct costs $ 365,000 $ 141,000 $ 950,000 $ 3,740,000

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

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
From Administration Accounting Domestic International
Department costs
Administration allocation
Accounting allocation
Total cost

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.)

To
From Administration Accounting Domestic International
Department costs
Administration allocation
Accounting allocation
Total cost $0 $0 $0 $0

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. Round your final answers to the nearest whole dollar amounts.)

To
From Administration Accounting Domestic International
Department costs
Administration allocation
Accounting allocation
Total cost $0 $0 $0 $0

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