Reference no: EM131215677
GB Service Corporation has two service departments, Administration and Accounting, and two operating departments, East and West. Administration costs are allocated on the basis of employees, and Accounting costs are allocated on the basis of number of transactions. A summary of GB operations follows: Administration Accounting East West Employees – 25 15 60 Transactions 50,000 – 10,000 40,000 Department direct costs $ 90,000 $ 36,000 $ 234,000 $ 900,000 Required: (a) Allocate the cost of the service departments to the operating departments using the direct method. (Do not round intermediate calculations.) (b) Allocate the cost of the service departments to the operating departments using the step method. Start with Administration. (Do not round intermediate calculations.) (c) Allocate the cost of the service departments to the operating departments using the reciprocal method. (Do not round intermediate calculations. Round your answers to the nearest dollar amount.)
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