Solution-Allocate the costs of personnel and administration

Allocate the costs of personnel and administration

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Reference no: EM132712749

Salado Inc. provides cleaning services through its Residential and Commercial divisions. Support services of the company are provided by Personnel and Administrative areas. Costs of these two areas are allocated to the revenue producing departments. Personnel costs are allocated using number of employees; administration costs are allocated using direct department costs. The following 2013 budgeted information is available:

	Personnel	Administration	Residential	Commercial
Direct costs	$140,000	$180,000	$480,000	$800,000
Number of employees	12	30	72	48
Direct labor hours			60,000	90,000
Square feet cleaned			450,000	570,000

Required:

Question a. Using the direct method, allocate the costs of Personnel and Administration to the Residential and Commercial divisions.

Question b. Using the step-down method, allocate the costs of Personnel and Administration to the Residential and Commercial divisions.

Reference no: EM132712749

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Allocate the costs of personnel and administration

Reference no: EM132712749

Reference no: EM132712749

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