Question
Exercise 4B-3 Step-Down Method [LO4-11] The Ferre Publishing Company has three service departments and two operating departments. Selected data from a recent period on the
Exercise 4B-3 Step-Down Method [LO4-11]
The Ferre Publishing Company has three service departments and two operating departments. Selected data from a recent period on the five departments follow: |
Service Departments | Operating Departments | |||||
Administration | Janitorial | Maintenance | Binding | Printing | Total | |
Costs | $95,000 | $70,000 | $35,000 | $246,000 | $495,000 | $941,000 |
Number of employees | 147 | 105 | 420 | 1,050 | 525 | 2,247 |
Square feet of space occupied | 5,100 | 20,400 | 17,000 | 34,000 | 119,000 | 195,500 |
Hours of press time | 15,000 | 32,000 | 47,000 | |||
|
The company allocates service department costs by the step-down method in the following order: Administration (number of employees), Janitorial (space occupied), and Maintenance (hours of press time). |
Required: |
Using the step-down method, allocate the service department costs to the operating departments. (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.)2 |
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