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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:
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: Operating Departments Departmental costs before allocations Employee-hours Space occupied-square feet Required: $ 150,000 320 250 Service Departments Administration Janitorial $ 40,000 160 100 Groceries $2,320,000 Gifts $950,000 3,100 4,000 740 1,000 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. (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.) Operating Departments Groceries Gifts 40,000 $2,320,000 $ Departmental costs before allocations Allocations: Administration costs Janitorial costs Total costs after allocations Service Departments Janitorial 150,000 $ Administration + Total 950,000 $3,460,000
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