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Steven Parker owns and operates Steven's Septic Service and Legal Advice. Steven's two revenue generating (production) operations are supported by two service departments: Clerical
Steven Parker owns and operates Steven's Septic Service and Legal Advice. Steven's two revenue generating (production) operations are supported by two service departments: Clerical and Janitorial. Costs in the service departments are allocated in the following order using the designated allocation bases: Clerical: Variable cost: expected number of work orders processed Fixed cost: long-run average number of work orders processed Janitorial: Variable cost: labor hours Fixed cost: square footage of space occupied Average and expected activity levels for next month (June) are as follows: No. of Work Labor Square Orders Expected Average Hours Footage Septic Service 50 75 880 2,160 Legal advice 30 25 1,320 2,640 Clerical 15 15 480 1,680 Janitorial 5 25 280 1,080 Expected costs in the service departments for June are as follows: Janitorial $5,500 Clerical Variable costs Fixed costs $14,400 $ 9,200 $ 960 Under the direct method of allocation, what is the total amount of service cost allocated to the Legal Advice operation for June? (Round all calculations to the nearest whole dollar)
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