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Linda_us
Linda_us, Finance, Accounts & Homework Tutor
Category: Homework
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Experience:  Post Graduate Diploma in Management (MBA)
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<p>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.<br />           <br />                                      Service Department                         Operating Department<br />                             </p><p>                                        Administrative      Facilities                Assembly          Finishing</p><p>Departmental Costs.....    $23,040               $79,950                $111,560         $335,360<br />Employee hours..........      5,000                  2,000                    25,000           11,000<br />Space Occupied.......        8,000                  2,000                    37,000             4,000</p><p>Administrative Department costs are allocated on the basis of employee hours and Facilities Department costs are allocated on the basis of space occupied.</p><p>Required:<br />a. Allocate the service department costs to the operating departments using the direct method.<br />b. Allocate the service department costs to the operating departments using the step-down method beginning with Administrative.</p>
Submitted: 6 years ago.
Category: Homework
Expert:  Linda_us replied 6 years ago.
Hi Customer

The way data is presented its not clear. Please upload the formatted data?

Regards

Linda
Customer: replied 6 years ago.

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.

 

Required:
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.

Expert:  Linda_us replied 6 years ago.
Yes this is better. I am working on it.
Expert:  Linda_us replied 6 years ago.
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