Answered step by step
Verified Expert Solution
Question
00
1 Approved Answer
Exercise 11A-9 Direct Method [LO6] Arbon Company has three service departments and two operating departments. Selected data concerning the five departments are presented below: Service
Exercise 11A-9 Direct Method [LO6] Arbon Company has three service departments and two operating departments. Selected data concerning the five departments are presented below: Service Departments Operating Departments Equipment Administrative Janitorial Maintenance 584,000 $67,800 $36,000 80 60 240 300 1,200 1,000 Costs Number of employees Square metres of space occupied Machine-hours Finishing $498,600 Total Prep $256,100 600 2,000 7,880 30, see 1,280 11,500 48, eee The company allocates service department costs by the step-down method in the following order. Administrative (number of employees). Janitorial (space occupied), and Equipment Maintenance (machine hours) Required: Assuming that the company uses the direct method rather than the step-down method to allocate service department costs, how much overhead cost would be assigned to each operating department? (Negative amounts should be indicated by a minus sign.) Answer is not complete. Service Departments Administrative Janitorial Maintenance Equipment 84,000 67,800S 36,000 Operating Departments Prep Prep Finishing 256,100 $ 498,600 S Total 942.500 Departmental costs before allocations Allocations: Administrative Janitorial Equipment maintenance Total costs after allocation (84,000) 00 (67.800) 0 28,000 67,800 0 0 0 (36,000) 0 56.000 67.800 67,800 X 447,700 00 $ S 594,400 5 942,500
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started