The Star Company uses the step method for allocating the costs of its service departments to operating departments. The company has two service departments and two operating departments. The selected information for the four departments is given below. SERVICE DEPARTMENTS DEPARTMENTS OPERATING Dept. A Dept. B Dept. X Dept. Y Total Departmental costs before allocation $180,000 $45,000 $130,500 $344,500 $700,000 Employee hours Space occupied - square feet 6,000 3,000 9,000 15,000 33,000 5,000 100 3,000 22,000 30,100 The company uses employee hours as the base for allocating the cost of department A and space occupied for allocating the cost of department B.

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
icon
Related questions
Question

Allocate the cost of service departments to operating department using step down method

The Star Company uses the step method for allocating the costs of its service departments to operating departments. The company has two
service departments and two operating departments. The selected information for the four departments is given below:
SERVICE
DEPARTMENTS DEPARTMENTS
OPERATING
Dept. A Dept. B Dept. X Dept. Y
Total
Departmental costs before
allocation
$180,000 $45,000 $130,500 $344,500 $700,000
Employee hours
Space occupied - square feet
6.000
3,000
9,000
15,000
33,000
5.000
100
3,000
22,000
30,100
The company uses employee hours as the base for allocating the cost of department A and space occupied for allocating the cost of department B.
Transcribed Image Text:The Star Company uses the step method for allocating the costs of its service departments to operating departments. The company has two service departments and two operating departments. The selected information for the four departments is given below: SERVICE DEPARTMENTS DEPARTMENTS OPERATING Dept. A Dept. B Dept. X Dept. Y Total Departmental costs before allocation $180,000 $45,000 $130,500 $344,500 $700,000 Employee hours Space occupied - square feet 6.000 3,000 9,000 15,000 33,000 5.000 100 3,000 22,000 30,100 The company uses employee hours as the base for allocating the cost of department A and space occupied for allocating the cost of department B.
Expert Solution
steps

Step by step

Solved in 2 steps with 1 images

Blurred answer
Knowledge Booster
Process strategy
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, operations-management and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Practical Management Science
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
Operations Management
Operations Management
Operations Management
ISBN:
9781259667473
Author:
William J Stevenson
Publisher:
McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi…
Operations and Supply Chain Management (Mcgraw-hi…
Operations Management
ISBN:
9781259666100
Author:
F. Robert Jacobs, Richard B Chase
Publisher:
McGraw-Hill Education
Business in Action
Business in Action
Operations Management
ISBN:
9780135198100
Author:
BOVEE
Publisher:
PEARSON CO
Purchasing and Supply Chain Management
Purchasing and Supply Chain Management
Operations Management
ISBN:
9781285869681
Author:
Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:
Cengage Learning
Production and Operations Analysis, Seventh Editi…
Production and Operations Analysis, Seventh Editi…
Operations Management
ISBN:
9781478623069
Author:
Steven Nahmias, Tava Lennon Olsen
Publisher:
Waveland Press, Inc.