The Ferre Publishing Company has three service departments and two operating departments . Selected data from a recent period on the five departments follows: Service Deprtment Operating Department Admin Janitorial Maint. Binding Printing Total Overhead costs $ 140.000 $ 105,000 $ 48,000 $ 275,000 $ 430.000 $ 998,000 Numberof 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 Required: A. The company allocates service department costs by the step method in the following order. Administration,(number of employees), Janitorial (space occupied), and Maintenance ( hoursof presstime). The company makes no distinction between variable and fixed service department costs. B. The company uses the direct method. How much overhead cost would be assigned to each operating department?Solution: Service Deprtment Operating Department Admin Janitorial Maint Binding Printing Total A. Step Method Overhead costs Allocations: Admin Cost Janitorial Cost Maintenance Cost Total overhead costsafter allocations Supporting computations: Administration cost allocateed on the basis of Janitorial costs allocated on the basis of Basis 96 Allocation Basis 1% Allocation Janitorial Maintenance Maintenance Binding Binding Printing Printing Total Total Maintenaned costs allocated on the basis of Bazis % Allocation Binding Printing TotalService Deportment Operating Department Admin Janitorial Maint. Binding Printing Total B Direct Method Overhead costs Allocations Admin Cost Janitorial Cost Maintenance Cost Total overhead costsafter allocations Supporting computations. Administration cost allocateed on the basis of Janitorial costs allocated on the basis of Basis $% Allocation Allocation Binding Binding Printing Printing Total Maintennned costs allocated on the basis of BANis % Allocation Binding Printing Total