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employees, and BluStar Company has two service departments, Administration and Accounting, and two operating departments, Domestic and Interational. Administration costs are allocated on the basis
employees, and BluStar Company has two service departments, Administration and Accounting, and two operating departments, Domestic and Interational. Administration costs are allocated on the basis Accounting costs are allocated on the basis of number of transactions. A summary of Blustar operations follows: Administration Accounting Domestic International Employees 30 45 25 Transactions 37,000 23,000 92,000 Department direct costs $356,000 $140,000 $ 940,000 $3,790,000 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 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.) To Administration Accounting Domestic International From Department costs Administration allocation Accounting allocation Total cost allocated 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 From Administration Accounting Domestic International Department costs Administration allocation Accounting allocation Total cost allocated
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