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Chapter 4 Q4 Madison Park Co-op, a whole foods grocery and gift shop, has provided the following data to be used in its service department

Chapter 4 Q4

Madison Park Co-op, a whole foods grocery and gift shop, has provided the following data to be used in its service department cost allocations:

Service Departments

Operating Departments

Administration Janitorial Groceries Gifts
Departmental costs before allocations $ 200,000 $ 60,000 $ 3,890,000 $ 340,000
Employee-hours 470 350 2,700 150
Space occupiedsquare feet 800 1,400 9,200 800

Required:

Using the step-down method, allocate the costs of the service departments to the two operating departments. Allocate Administration first on the basis of employee-hours and then Janitorial on the basis of space occupied. (Please enter allocations from a department as negative and allocations to a department as positive. The line should add across to zero. Do not round intermediate calculations. Round your answers to the nearest dollar amount.)

Service Departments Operating Departments
Administration Janitorial Groceries Gifts Total
Departmental costs before allocations $200,000 $60,000 $3,890,000 $340,000 $4,490,000
Allocation:
Administration costs
Janitorial costs
Total costs after allocation $200,000 $60,000 $3,890,000 $340,000 $4,490,000

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