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State Financial Corp. has three service departments (Administration, Communications, and Facilities), and two production departments (Deposits and Loans). A summary of costs and other data
State Financial Corp. has three service departments (Administration, Communications, and Facilities), and two production departments (Deposits and Loans). A summary of costs and other data for each department prior to allocation service department costs for the year ended December 31 follows Communications $280,000 33,000 Administration $180,000 27,500 Facilities $255.000 21,500 Deposits $7,700,000 495 200 Loans $5,300,000 35 Direct costs pye hours ees Square footage occupied 4.600 12,600 5,300 242.700 201,600 The costs of the service departments are allocated on the following bases: Administration, employee-hours; Communications, number of employees, and Facilities, square footage occupied. (Do not round intermediate calculations.) Required: a. Assume that the bank elects to distribute service department costs to production departments using the direct method. What amount of Communications Department costs is allocated to the Deposits Department? Amount requirement (a). What amount of Administration Department costs is allocated to the Loans Department? . Assume the same method of allocation as Amount c. Assuming that the bank elects to distribute service department costs to other departments using the step method (starting with Facilities and then Communications), what amount of Facilities Department costsi allocated to the Communications Department? Amount d. Assume the same method of allocation as in requirement (c). What amount of Communication Department costs is allocated to Facilities? Amount
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