The Fitness Club has two operating departments- Programming & Classes and Individual fitness. There are also two service centers- Janitorial and Cafeteria. Janitorial costs are allocated based on square footage, while Cafeteria costs are allocated based on number of employees. The costs traceable to the operating and service center during 2019 were as follows: Service Centers Operating Departments Programming & Classes Individual Janitorial Cafeteria Fitness Materials 5,000 Labor МОН Total Square footage No. of Employee P 10,000 P 200,000 P 8,000 P 100,000 20,000 130,000 1,600 5 300,000 40,000 540,000 8,000 14 265,000 75,000 348,000 24,000 19 150,000 90,000 245,000 32,000 In addition to these costs, the Cafeteria generates revenues of P480,000. Janitorial is allocated based on square footage and Cafeteria is allocated based on the number of employees. Using the step method to allocate the service center costs, what is the total cost of Programming and Classes?

The Fitness Club has two operating departments- Programming & Classes and Individual fitness. There are also two service centers- Janitorial and Cafeteria. Janitorial costs are allocated based on square footage, while Cafeteria costs are allocated based on number of employees. The costs traceable to the operating and service center during 2019 were as follows: Service Centers Operating Departments Programming & Classes Individual Janitorial Cafeteria Fitness Materials 5,000 Labor МОН Total Square footage No. of Employee P 10,000 P 200,000 P 8,000 P 100,000 20,000 130,000 1,600 5 300,000 40,000 540,000 8,000 14 265,000 75,000 348,000 24,000 19 150,000 90,000 245,000 32,000 In addition to these costs, the Cafeteria generates revenues of P480,000. Janitorial is allocated based on square footage and Cafeteria is allocated based on the number of employees. Using the step method to allocate the service center costs, what is the total cost of Programming and Classes?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter7: Allocating Costs Of Support Departments And Joint Products

Section: Chapter Questions

Problem 30E: A company uses charging rates to allocate service department costs to the using departments. The...

See similar textbooks

Related questions

Q: Departmental information for the four departments at Samoa Industries is provided below. Total Cost…

A: Total no. of square feet for Cafeteria, Cutting, and Assembly departments =20000+4000+16000 = 40000…

Q: Bricks and Mortar Manufacturing produces building materials for local construction contractors. BMM…

A: Formula used: Cleaning costs allocated to the Baking department=Cleaning costs incurred×Baking…

Q: Nile Corp. has identified three cost pools to allocate overhead costs. The following estimates are…

A: Activity-based costing is a method of costing that identifies activities in business that incurs…

Q: Western Services has three service departments: Information Systems (IS), Personnel, and…

A: The step method of cost allocation, also known as the step-down method or sequential allocation…

Q: [The following information applies to the questions displayed below.] Caro Manufacturing has two…

A: The question is based on the concept of Cost Accounting.

Q: Using the sequential method, Pone Hill Company allocates Janitorial Department costs based on square…

A: The objective of the question is to determine the percentage usage of the Janitorial Department by…

Q: Jingga Sdn Bhd has three production departments - Machining, Assembly and Finishing; and two service…

A: Absorption costing is a method used for allocation of manufacturing overhead to the product, for…

Q: Swifty's Medical operates three support departments and two operating units, Surgery and ER. The…

A: Cost allocation is a process of allocating supporting departments cost to the operating departments.…

Q: CakeCo, Incorporated has three operating departments. Information about these departments is listed…

A: Service department cost can be allocated to production department based on the activity driver.…

Q: Mervon Company has two operating departments: mixing and bottling. Mixing occupies 26,640 square…

A: The indirect factory overhead is the company's expenses and is not included in the manufacturing…

Q: A Community Hospital has two (2) service departments: Maintenance and Food Services. The hospital…

A: Cost allocation is a method of delivering assistance to the cost centres of a joint service…

Concept explainers

Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyze overhead expense as it helps the company in determining how much a company must charge for its products and services so that they can generate profit. Overhead expenses depend upon the nature of the business operations.

Question

The Fitness Club has two operating departments- Programming & Classes and Individual fitness.
There are also two service centers- Janitorial and Cafeteria. Janitorial costs are allocated based on
square footage, while Cafeteria costs are allocated based on number of employees. The costs
traceable to the operating and service center during 2019 were as follows:
Service Centers
Operating Departments
Programming & Classes Individual
Janitorial
Cafeteria
Fitness
Materials
5,000
Labor
МОН
P 10,000
P 200,000
P 8,000
100,000
20,000
130,000
1,600
5
300,000
40,000
540,000
8,000
14
265,000
75,000
348,000
24,000
19
150,000
90,000
245,000
32,000
Total
Square footage
No. of Employee
In addition to these costs, the Cafeteria generates revenues of P480,000. Janitorial is allocated based
on square footage and Cafeteria is allocated based on the number of employees.
Using the step method to allocate the service center costs, what is the total cost of Programming
and Classes?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 3 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

The Vest School of Vocational Technology has organized the school training programs into three departments. Each department provides training in a different area as follows: nursing assistant, dental hygiene, and office technology. The school's owner, Candice Vest, wants to know how much it cost to operate each of the three departments. To accumulate the total cost for each department, the accountant has identified several indirect costs that must be allocated to each. These costs are $10,080 of telephone expense, $2,016 of supplies expense, $720,000 of office rent, $144,000 of janitorial services, and $150,000 of salary paid to the dean of students. To provide a reasonably accurate allocation of costs, the accountant has identified several possible cost drivers. These drivers and their association with each department follow. Cost Driver Department 1 Department 2 Department 3 Number of telephone 28 16 19 Number of faculty members 20 16 12 Square footage of office space 28,000 16,800…
Phoenix Partners provides management consulting services to government and corporate clients. Phoenix has two support departments administrative services (AS) and information systems (IS) and two operating departments-government consulting (GOVT) and corporate consulting (CORP). For the first quarter of 2020, Phoenix's cost records indicate the following: (Click the icon to view the cost records.) Read the requirements. Requirement 1a. Allocate the two support departments' costs to the two operating departments using the direct method. (Do not round intermediary calculations and round your final answers to the nearest whole dollar. Use parentheses or a minus sign when decreasing departments by allocating costs. Enter a "0" for any zero balances.) Operating Departments Support Departments AS GOVT CORP Direct Method Budgeted overhead costs before interdepartment cost allocations Allocation of AS costs Allocation of IS costs Total budgeted overhead of operating departments …………. IS Total
Phoenix Partners provides management consulting services to government and corporate clients. Phoenix has two support departments administrative services (AS) and information systems (IS) and two operating departments-government consulting (GOVT) and corporate consulting (CORP). For the first quarter of 2020, Phoenix's cost records indicate the following: (Click the icon to view the cost records.) Read the requirements. Requirement 1c. Allocate the two support departments' costs to the two operating departments using the step-down method (Allocate IS first). (Do not round intermediary calculations and round your final answers to the nearest whole dollar. Use parentheses or a minus sign when decreasing departments by allocating costs. Enter a "0" for any zero balances.) Support Departments AS Operating Departments CORP Step-down Method IS GOVT Total Budgeted overhead costs 690,000 $2,100,000 $8,675,000 $12,490,000 $23,955,000 before interdepartment cost allocations Allocation of IS…
Uramilaben
Canfield Technical School allocates administrative costs to its respective departments based on the number of students enrolled, while maintenance and utility costs are allocated based on the square footage of each department's classroom. Based on the information below, what is the total amount of administrative cost to the Accounting Department (rounded to the nearest dollar) if administrative costs for the school were $56,000, maintenance fees were $12,600, and utilities were $6,300? Department Electrical Students 126 Classroom Square Feet 10,300 Welding 73 12,300 Accounting 53 8,300 Carpentry 43 6,300 Total 295 37,200
The Housekeeping Department of Micanopy Hospital has direct costs of $500,000. The hospital's four patient service departments utilize the following amounts of space:Department A = 1,000 square feetDepartment B = 2,000 square feetDepartment C = 3,000 square feetDepartment D = 4,000 square feet Assuming that the cost driver for housekeeping costs is the amount of occupied space, what is the allocation of housekeeping costs to each department? Show all work. ....typing only
Solomon Information Services, Incorporated, has two service departments: human resources and billing. Solomon's operating departments, organized according to the special Industry each department serves, are health care, retall, and legal services. The billing department supports only the three operating departments, but the human resources department supports all operating departments and the billing department. Other relevant information follows. Number of employees Annual cost* Annual revenue Req A1 Department Human Resources Billing Health Care Retail Req A2 Legal Services Total 20 $ 900,000 Complete this question by entering your answers in the tabs below. Allocation Rate Req B1 *This is the operating cost before allocating service department costs. Required a. Allocate service department costs to operating departments, assuming that Solomon adopts the step method. The company uses the number of employees as the base for allocating human resources department costs and department…
Lackawanna Community College has three divisions: Liberal Arts, Sciences, and Business Administration. The college’s comptroller is trying to decide how to allocate the costs of the Admissions Department, the Registrar’s Department, and the Computer Services Department. The comptroller hascompiled the following data for the year just ended. Department Annual CostAdmissions ................................................................................................... $ 90,000Registrar ............................................................................................................ 150,000Computer Services ......................................................................................... 320,000 Division Budgeted Budgeted Planned Courses Enrollment Credit Hours Requiring Computer WorkLiberal Arts .............…
Indigo's Medical operates three support departments and two operating units, Surgery and ER. The support departments are allocated based on the hours used. The cost of operating the accounting (acct), administration (admin), and human resources (HR) departments is $261200, $147600, and $59300, respectively. Information on the hours used are as follows: Acct Admin HR Surgery ER Hours in Acct 20 48 360 220 Hours in Admin 16 8 120 80 Hours in HR 8 65 130 What amount of costs would be allocated from the accounting department to the other support departments (admin and HR) using the reciprocal method to allocate costs? (Do not round the intermediate calculations.) O $0. O $27403 O $28939. O $28726.
Blue Spruce's Medical operates three support departments and two operating units, Surgery and ER. The support departments are allocated based on the hours used. The cost of operating the accounting (acct), administration (admin), and human resources (HR) departments is $272600, $158000, and $59400, respectively. Information on the hours used are as follows: Acct Admin HR Surgery ER Hours in Acct 20 48 360 220 Hours in Admin 16 8 120 80 Hours in HR 8 4 65 130 What are the total costs allocated to the ER department from the supporting departments? (Do not round the intermediate calculations.) O $199987. O $212460. O $0. O $186182.
Answer in text form please
Sheffield's Medical operates three support departments and two operating units, Surgery and ER. The support departments are allocated based on the hours used. The cost of operating the accounting (acct), administration (admin), and human resources (HR) departments is $271300, $153300, and $66700, respectively. Information on the hours used are as follows: Acct Admin HR Surgery ER Hours in Acct 20 48 360 220 Hours in Admin 16 8 120 80 Hours in HR 8 4 65 130 What amount of costs would be allocated from the accounting department to the other support departments (admin and HR) using the reciprocal method to allocate costs? (Do not round the intermediate calculations.) O $30079. O $28381. O $0. O $29866.