GB Service Corporation has two service departments, Administration and Accounting, and two operating departments, East and West Administration costs are allocated on the basis of employees, and Accounting costs are allocated on the basis of number of transactions A summary of GB operations follows Administration Accounting East West Employees 29 13 58 Transactions 45,000 10,000 40,000 Department direct costs $ 54,000 $ 20,000 $ 120,000 $ 510,000 Required (a) Allocate the cost of the service departments to the operating departments using the direct method (Do not round intermediate calculations Round your answers to the nearest dollar amount ) Admin Accounting East West Department cost Adminstration Allocation Accounting Allocation total (b) Allocate the cost of the service departments to the operating departments using the step method Start with Administration (Do not round intermediate calculations Round your answers to the nearest dollar amount ) Admin Accounting East West Department cost Adminstration Allocation Accounting Allocation total (c) Allocate the cost of the service departments to the operating departments using the reciprocal method ( Do not round intermediate calculations Round your answers to the nearest dollar amount ) Admin Accounting East West Department cost Adminstration Allocation Accounting Allocation total

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Sep 30, 2024

GB Service Corporation has two service departments, Administration and Accounting, and two operating departments, East and West. Administration costs are allocated on the basis of

GB Service Corporation has two service departments, Administration and Accounting, and two operating departments, East and West. Administration costs are allocated on the basis of employees, and Accounting costs are allocated on the basis of number of transactions. A summary of GB operations follows:

	Administration		Accounting		East		West
Employees				29		13		58
Transactions		45,000				10,000		40,000
Department direct costs	$	54,000	$	20,000	$	120,000	$	510,000

Required:

(a)

Allocate the cost of the service departments to the operating departments using the direct method. (Do not round intermediate calculations. Round your answers to the nearest dollar amount.)

	Admin	Accounting	East	West
Department cost
Adminstration Allocation
Accounting Allocation
total

(b)

Allocate the cost of the service departments to the operating departments using the step method. Start with Administration. (Do not round intermediate calculations. Round your answers to the nearest dollar amount.)

	Admin	Accounting	East	West
Department cost
Adminstration Allocation
Accounting Allocation
total

(c)

Allocate the cost of the service departments to the operating departments using the reciprocal method.(Do not round intermediate calculations. Round your answers to the nearest dollar amount.)