2.Arbon Company has three service departments and two operating departments. Selected data concerning the five departments arepresented below:CostsNumber of employeesSquare metres of space occupiedMachine-hoursAdministrative$84.00080300Service DepartmentsJanitorial$67,800601.200toEquipment Maintenance$36.0002401,000ServiceOperating DepartmentsPrep$256.1006002,00010,000Finishing$498.600*3007.00030,000The company allocates service department costs by the step-down method in the following order: Administrative (number of employees).Janitorial (space occupied), and Equipment Maintenance (machine-hours).Required:Using the step-down method, allocate the service department costs to the operating departments.Total$942.5001.28011.50040,000OperatingDonartments

Cost allocation is used in analyzing or identifying the process to assign the cost to people, and…

2. Arbon Company has three service departments and two operating departments. Selected data concerning the five departments are presented below: Administrative $84,000 .6 Service Departments Janitorial $67,800 80 300 Costs Number of employees Square metres of space occupied Machine-hours The company allocates service department costs by the step-down method in the following order: Administrative (number of employees). Janitorial (space occupied), and Equipment Maintenance (machine-hours). Required: Using the step-down method, allocate the service department costs to the operating departments. Condica Equipment Maintenance 60 1.200 $36,000 240 Operating Departments Prep Finishing $256,100 $498.600 $942.500 Total 1.280 11.500 40,000 1.000 600 2.000 10,000 300 7,000 30,000 Operating

2. Arbon Company has three service departments and two operating departments. Selected data concerning the five departments are presented below: Administrative $84,000 .6 Service Departments Janitorial $67,800 80 300 Costs Number of employees Square metres of space occupied Machine-hours The company allocates service department costs by the step-down method in the following order: Administrative (number of employees). Janitorial (space occupied), and Equipment Maintenance (machine-hours). Required: Using the step-down method, allocate the service department costs to the operating departments. Condica Equipment Maintenance 60 1.200 $36,000 240 Operating Departments Prep Finishing $256,100 $498.600 $942.500 Total 1.280 11.500 40,000 1.000 600 2.000 10,000 300 7,000 30,000 Operating

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Exercise 5-6. ALLOCATION OF SERVICE DEPARTMENT COSTS