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Dynamic Petroleum Logistical Solutions is an integrated company providing oil exploration, crude oil refining and petroleum products distribution throughout the United States and Canada. You

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Dynamic Petroleum Logistical Solutions is an integrated company providing oil exploration, crude oil refining and petroleum products distribution throughout the United States and Canada. You have been provided with Direct Costs for the following 4 service organizations and 3 operating organizations: Service Organizations: 1. Home Office 2. Information Systems 3. Human Resources 4. Accounting I Operating Organizations: 1. Exploration 2. Refining 3. Distribution Using both the Direct and Step-Down methods, calculate the total allocated service costs and direct costs for the operating organizations: Exploration Division, Refining Division, and Distribution Division. Direct Method -- Percentage of Services Used By Operating Organizations Direct Costs Home Office Service Organirations Information Human Systems Resources Accounting Exploration Refining Distribution Total Direct Basis $575,000 10% 10% 10% 20% 50% 10% 80% $330,000 10% 10% 10% 40% 20% 20% 80% $410,000 10% 10% 10x1 50% 20% 10% 80% Organization Home Office Information Systems Human Resources Accounting Exploration Refining Distribution Total Costs $731,200 10% 10% 10% 60% 10% 10% 80% $650,000 $337,800 $695,000 $3,729,000 30% 30% 30% 30% 170% 100% 50% Allocated Services Costs + Direct Costs Exploration Refining Distribution Totals Home Office 0 Information Systems 0 Human Resources 0 : Accounting 0 Total Allocations 0 0 0 0 Direct Costs 0 Total Costs $0 $0 $0 $0 Step Method - Percentage of Services Used By Service Organizations Operating Organizations Organization Direct Costs Home office Information Systems Human Resources Accounting Exploration Refining Distribution Total Direct Basis $575,000 10% 10% 10% 20% 40% 10% 100% Home Office Information Systems Human Resources $330,000 10% 10% 10% 20% 20% 30% 90% $410,000 10% 10% 10% 30% 20% 20% 80% $731,200 10% 10% 30% 20% 20% 70% Accounting Exploration $650,000 Refining $337,800 Distribution $695,000 Total $3,729,000 30% 30% 20% 30% 100% 100% 80% Step Down Allocated Services Costs + Direct Costs Bose Cost Step Down Cast Information Systems Human Resources Accounting Exploration Refining Distribution Total Costs Home Office Information Systems Human Resources Accounting Total Allocated Costs 0 0 0 Direct Costs Total Costs $0 $0 $0 $0 Direct Method $0 $0 $0 $0

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