SB Exercise 4B-3 through Exercise 4B-4 (Algo)

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The Ferre Publishing Company provided the following data for its three service departments and two operating departments.

	Service Departments	Operating Departments	Total
Administration	Janitorial	Maintenance	Binding	Printing
Costs	$ 145,600	$ 109,200	$ 49,920	$ 286,000	$ 447,200	$ 1,037,920
Number of employees	60	35	140	315	210	760
Square feet of space occupied	15,000	10,000	20,000	40,000	100,000	185,000
Hours of press time				30,000	60,000	90,000

Exercise 4B-3 (Algo) Step-Down Method [LO4-11]

The company uses the step-down method to allocate service department costs 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.

Note: 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.

SB Exercise 4B-3 through Exercise 4B-4 (Algo)

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The Ferre Publishing Company provided the following data for its three service departments and two operating departments.

	Service Departments	Operating Departments	Total
Administration	Janitorial	Maintenance	Binding	Printing
Costs	$ 145,600	$ 109,200	$ 49,920	$ 286,000	$ 447,200	$ 1,037,920
Number of employees	60	35	140	315	210	760
Square feet of space occupied	15,000	10,000	20,000	40,000	100,000	185,000
Hours of press time				30,000	60,000	90,000

Exercise 4B-4 (Algo) Direct Method [LO4-10]

Administration is allocated based on number of employees; Janitorial based on space occupied; and Maintenance based on hours of press time.

Required:

Assuming the company uses the direct method rather than the step-down method, how much cost would be assigned to each operating department?

Note: 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.