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Homework answers / question archive / Arbon Company has three service departments and two operating departments
Arbon Company has three service departments and two operating departments. Selected data concerning the five department: presented below:
Service Departments Operating Departments
Equipment Administrative Janitorial Maintenance Prep Finishing Total Costs $89,000 $67,800 $36,000 $256,100 $498,600 $947,500 Number of employees 80 60 240 600 300 1,280 Square metres of space occupied 300 1,200 1,000 2,000 7,000 11,500 Machine-hours 20,000 30,000 50,000
110•1•11•1•11•1•111.
The company allocates service department costs by the step-down method in the following order: Administrative (number of employees), Janitorial (space occupied), and Equipment Maintenance (machine-hours).
Required: Using the step-down method, allocate the service department costs to the operating departments. (Negative amounts should b indicated by a minus sign.)
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