Required information SB Exercise 4B-3 through Exercise 4B-4 (Algo) The Ferre Publishing Company has three service departments and two operating departments. Selected data from a recent period on the five departments follow: Costs Number of employees Square feet of space occupied Hours of press time Service Departments Administration Janitorial Maintenance $ 162,400 $ 55,680 140 20,000 $ 121,800 60 15,000 35 10,000 Operating Departments Binding $ 319,000 315 40,000 30,000 Printing $ 498,800 210 100,000 60,000 Total $ 1,157,680 760 185,000 90,000 Exercise 4B-3 (Algo) Step-Down Method [LO4-11] The company allocates service department costs by the step-down method in the following order: Administration (number of employees), Janitorial (space occupied), and Maintenance (hours of press time). Required: Using the step-down method, allocate the service department costs to the operating departments. (Please enter allocations from department as negative and allocations to a department as positive. The line should add across to zero. Do not round intermediate calculations.)
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
A3
![Required information
SB Exercise 4B-3 through Exercise 4B-4 (Algo)
The Ferre Publishing Company has three service departments and two operating departments. Selected data from a
recent period on the five departments follow:
Costs
Number of employees
Square feet of space occupied
Hours of press time
Service Departments
Administration Janitorial Maintenance
$ 162,400 $ 121,800 $ 55,680
140
20,000
Departmental costs before allocations
Allocations:
60
15,000
Administration costs
Janitorial costs
Maintenance costs
Total costs after allocations
35
10,000
Exercise 4B-3 (Algo) Step-Down Method [LO4-11]
The company allocates service department costs by the step-down method in the following order: Administration (number of
employees), Janitorial (space occupied), and Maintenance (hours of press time).
Service Departments
Administration Janitorial
$ 162,400 $
121,800 $
$ 162,400 $
Required:
Using the step-down method, allocate the service department costs to the operating departments. (Please enter allocations from a
department as negative and allocations to a department as positive. The line should add across to zero. Do not round
intermediate calculations.)
Maintenance
121,800 $
Operating Departments
Binding
$ 319,000
315
40,000
30,000
55,680 $
55,680 $
Printing
$ 498,800
210
100,000
60,000
Operating Departments
Binding
Printing
319,000 $ 498,800 $
319,000 $
Total
$ 1,157,680
498,800
Total
760
185,000
90,000
1,157,680
$ 1,157,680](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe7789a6b-1374-4dd8-b706-f2a7662ad086%2F97098315-ae78-47b2-9977-69bbb2167025%2Fu9cqnwj_processed.png&w=3840&q=75)
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