I am writing it clearly but when l send it to you the format gets distorted. How do you recommend I send it? Let me try again if this doesn't work let me email it to you in word format as an attachment? Where Do you want me to send it if that is the case? But check this out first and tell me if you can read it better.
Maclennan Corporation wants to allocate service department costs to operating departments. The company has two service departments, Administrative and Facilities, and two operating departments, Assembly and Finishing.
Service Department Operating Department
Administrative Facilities Assembly Finishing
Departmental Costs..... $23,040 $79,950 $111,560 $335,360
Employee hours.......... 5,000 2,000 25,000 11,000
Space Occupied....... 8,000 2,000 37,000 4,000
Administrative Department costs are allocated on the basis of employee hours and Facilities Department costs are allocated on the basis of space occupied.
a. Allocate the service department costs to the operating departments using the direct method.
b. Allocate the service department costs to the operating departments using the step-down method beginning with Administrative.