Discuss the costs of the service departments

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Madison Park Co-op, a whole foods grocery and gift shop, has provided the following data to be used in its service department cost allocations:

Service Departments

Operating Departments

  Administration Janitorial Groceries Gifts
  Departmental costs before allocations $ 200,000       $ 60,000      $ 3,860,000    $ 340,000    
  Employee-hours         490            310              2,710            180    
  Space occupied-square feet         700             1,100              9,300          700    

Required:

Using the step-down method, allocate the costs of the service departments to the two operating departments. Allocate Administration first on the basis of employee-hours and then Janitorial on the basis of space occupied. (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 inter

Reference no: EM131812973

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