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Madison Park Co-op, a whole foods grocery and gift shop, has provided the following data to be used in its service department cost allocations: Service
Madison Park Co-op, a whole foods grocery and gift shop, has provided the following data to be used in its service department cost allocations:
Service Departments | Operating Departments | ||||||
Administration | Janitorial | Groceries | Gifts | ||||
Departmental costs before allocations | $200,000 | $60,000 | $3,820,000 | $350,000 | |||
Employee-hours | 450 | 330 | 2,700 | 170 | |||
Space occupiedsquare feet | 900 | 1,100 | 9,000 | 1,000 | |||
Required:
Using the step-down method, allocate the costs of the service departments to the two operating departments. Allocate Administration first on the basis of employee-hours and then Janitorial on the basis of space occupied.
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