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Books and Java, a book store and coffee shop, has provided the following data to be used in its service department cost allocations: Departmental costs
Books and Java, a book store and coffee shop, has provided the following data to be used in its service department cost allocations: Departmental costs before allocations Employee-hours Space occupied in square metres Required: Service Departments Administration Cleaning $300,000 640 500 $80,000 320 100 Operating Departments Book Store Coffee Shop $1,900,000 $4,640,000 6,200 4,000 1,480 1,000 Using the step-down method, allocate the costs of the service departments to the two operating departments. Allocate the costs of the Administration Department first on the basis of employee-hours and then on the costs of the Cleaning Services Department on the basis of space occupied. (Please enter allocations from a department as negative and allocations to a department as positive. Do not round intermediate calculations. Round your answers to the nearest dollar amount.) Departmental costs before allocations Allocations: Administration costs Cleaning costs Total costs after allocation Service Departments Administration Cleaning $ 300,000 $ 80,000 Operating Departments Book Store Coffee Shop $ 4,640,000 $ 1,900,000 Total $ 6,920,000
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