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 $152,600 $ 52,320 $ 114,450 35 10,000 140 20,000 60 15,000 Operating Departments Binding $ 299,750 315 40,000 30,000 Printing $ 468,700 210 100,000 60,000 Total $ 1,087,820 760 185,000 90,000
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 $152,600 $ 52,320 $ 114,450 35 10,000 140 20,000 60 15,000 Operating Departments Binding $ 299,750 315 40,000 30,000 Printing $ 468,700 210 100,000 60,000 Total $ 1,087,820 760 185,000 90,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Required information
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
$152,600
$ 52,320
140
20,000
$ 114,450
35
10,000
60
15,000
Operating Departments
Binding
$ 299,750
315
40,000
30,000
Printing
$ 468,700
210
100,000
60,000
Total
$ 1,087,820
768
185,000
90,000
The company allocates service department costs by the step-down method in the following order: Administration (number of
employees), Janitorial (space occupled), 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 a
department as negative and allocations to a department as positive. The line should add across to zero. Do not round
intermediate calculations.)
Transcribed Image Text: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 a
department as negative and allocations to a department as positive. The line should add across to zero. Do not round
intermediate calculations.)
Departmental costs before allocations.
Allocations:
Administration costs
Janitorial costs
Maintenance costs
Total costs after allocations
Service Departments
Administration Janitorial
$ 152,600 $ 114,450 $
$
152,600 $
Maintenance
114,450 $
52,320 S
52,320 $
Operating Departments
Binding
Printing
299,750 $
299,750 S
Total
468,700 $ 1,087,820
468,700 S 1,087,820
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