Splish Juice Company produces and distributes concentrated orange juice. It has been operating in two key customer

segments for years, selling to institutional customers and retail customers. The production departments are supported

by the following three services: Administrative, Information Systems, and Maintenance. To date, the accounting team

has simply allocated the support costs evenly between the two operating segments in order to determine total costs.

Realizing that there are more accurate ways of assigning these costs, the new controller has asked you to prepare

support department cost allocations using three other $($and arguably more accurate$)$ methods. Financial information is

as follows.

$($a$)$

Your answer is correct.

Determine the total costs that each operating segment would be accountable for if support costs are allocated

using the direct method. $($Round intermediate calculations to $4$ decinal places, es$.15\mathrm{.}2516$ and

final answers to $2$ decimal places, es $15\mathrm{.}25.)$

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Solution

Attempts: $3$ of $3$ used

$($b$)$

Determine the total costs that each operating segment would be accountable for if the step method is used to

allocate support costs; assume support departments are ranked according to their original cost. $($Roumd

intermediate calculations to $4$ deciend places, es$.152516$ and find answers to $2$ decimal

places, es $15\mathrm{.}25.$