Question
YaBaDaBaDoo Inc. has two Support Departments and two Operating Departments. Budgeted costs and budgeted activity in the various departments for the most recent year are
YaBaDaBaDoo Inc. has two Support Departments and two Operating Departments. Budgeted costs and budgeted activity in the various departments for the most recent year are presented below:
Custodial Services
Cafeteria
Cutting Department
Assembly Department
Overhead Costs
$229851
$147132
$675235
$891694
Square Metres of Space Occupied
1661
2176
7343
10494
Number of Employees
20
30
150
200
Machine Hour
40,000
60,000
Support Department costs are allocated to Operating Departments with the costs of Custodial Services allocated first on the basis of square metres of space occupied. The costs of the Cafeteria are allocated on the basis of number of employees. Predetermined overhead rates in the Cutting and Assembly departments are based on machine hours. Round all calculations to the nearest dollar.
Using the step-down method of allocation, what would be the amount of Custodial's cost allocated to the Assembly Department?
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