Interdepartmental Services: Step Method

ABC Manufacturing Company reports the following information for its two service departments and two producing departments.

Receiver of Services

Provider of Services Service A Service B Producing A Producing B

Service A $0\%0\%60\%40\%$

Service B $40\%0\%30\%30\%$

REQUIRED

Using the step method, prepare a schedule for ABC Manufacturing Company allocating the service department costs $($Departments A and B$)$ to the producing departments $($Departments A and B$).$ Assume that total costs for Service Department A are $$192,000$ and total costs for Service Department B are $$384,000.$

Note: enter all answer fields as positive numbers.

Service A Service B Producing A Producing B

Step $1$:

Service B costs Answer $1$

$384,000$

Allocate Service B costs to Service A$,$ Producing A$,$ and Producing B Answer $2$

$153,600$

$(384,000)$

Answer $3$

$115,200$

Answer $4$

$115,200$

Step $2$:

Reallocate Service A costs to Producing A and Producing B

$(153,600)$

Answer $5$

$0$

Answer $6$

$0$

Total allocation of Service B costs

$0$

$0$

$115,200$

$115,200$

Total allocation of Service A costs Answer $7$

$0$

Answer $8$

$0$

Total allocated service costs: