
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Required information.
The Ferre Publishing Company has three service departments and two operating departments. Selected data from a
recent period on the five departments follow:
Costs
Number of employees
Square feet of space occupied
Hours of press time
Departmental costs before allocations
Allocations:
Administration costs
Janitorial costs
Maintenance costs
Total costs after allocations
Service Departments
Administration Janitorial
$ 155,400 $ 116,550
35
10,000
60
15,000
$
$
Administration is allocated based on number of employees; Janitorial based on space occupied; and Maintenance based on hours of
press time.
Administration Janitorial
Required:
Assuming that the company uses the direct method to allocate service department costs, how much cost would be assigned to each
operating department? (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 intermediate calculations.)
Service Departments
Maintenance
$ 53,280
140
20,000
155,400 $ 116,550 $
155,400 $
Maintenance
116,550 $
Operating Departments
Binding
$ 305,250
315
40,000
30,000
53,280 $
53,280 $
Printing
$ 477,300
210
100,000
60,000
Total
$ 1,107,780
760
185,000
90,000
305,250 $
Operating Departments
Binding
Printing
305,250 $ 477,300 $ 1,107,780
Total
477,300 $ 1,107,780
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