FINANCIAL ACCOUNTING
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 are as follows:

#### Service Departments
1. **Administration**
   - Costs: $154,000
   - Number of Employees: 60
   - Square Feet of Space Occupied: 15,000
   - Hours of Press Time: Not applicable

2. **Janitorial**
   - Costs: $115,500
   - Number of Employees: 35
   - Square Feet of Space Occupied: 10,000
   - Hours of Press Time: Not applicable

3. **Maintenance**
   - Costs: $52,800
   - Number of Employees: 140
   - Square Feet of Space Occupied: 20,000
   - Hours of Press Time: Not applicable

#### Operating Departments
1. **Binding**
   - Costs: $302,500
   - Number of Employees: 315
   - Square Feet of Space Occupied: 40,000
   - Hours of Press Time: 30,000

2. **Printing**
   - Costs: $473,000
   - Number of Employees: 210
   - Square Feet of Space Occupied: 100,000
   - Hours of Press Time: 60,000

#### Total
- Costs: $1,097,800
- Number of Employees: 760
- Square Feet of Space Occupied: 185,000
- Hours of Press Time: 90,000

#### Allocation Method
The company allocates service department costs by the step-down method in the following order:
1. **Administration** (based on the number of employees)
2. **Janitorial** (based on space occupied)
3. **Maintenance** (based on hours of press time)

### Requirement

Using the step-down method, allocate the service department costs to the operating departments. 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.

#### Allocation Table

| Service Departments | Operating Departments |          |
|---------------------|-----------------------|----------|
|                     |                       | **Total**|
| **Administration**  | **Janitorial**        | **Maintenance** | **Binding** | **Printing** |             |
| Departmental Costs Before Allocations | $154,
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Transcribed Image Text:### Required Information The Ferre Publishing Company has three service departments and two operating departments. Selected data from a recent period on the five departments are as follows: #### Service Departments 1. **Administration** - Costs: $154,000 - Number of Employees: 60 - Square Feet of Space Occupied: 15,000 - Hours of Press Time: Not applicable 2. **Janitorial** - Costs: $115,500 - Number of Employees: 35 - Square Feet of Space Occupied: 10,000 - Hours of Press Time: Not applicable 3. **Maintenance** - Costs: $52,800 - Number of Employees: 140 - Square Feet of Space Occupied: 20,000 - Hours of Press Time: Not applicable #### Operating Departments 1. **Binding** - Costs: $302,500 - Number of Employees: 315 - Square Feet of Space Occupied: 40,000 - Hours of Press Time: 30,000 2. **Printing** - Costs: $473,000 - Number of Employees: 210 - Square Feet of Space Occupied: 100,000 - Hours of Press Time: 60,000 #### Total - Costs: $1,097,800 - Number of Employees: 760 - Square Feet of Space Occupied: 185,000 - Hours of Press Time: 90,000 #### Allocation Method The company allocates service department costs by the step-down method in the following order: 1. **Administration** (based on the number of employees) 2. **Janitorial** (based on space occupied) 3. **Maintenance** (based on hours of press time) ### Requirement Using the step-down method, allocate the service department costs to the operating departments. 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. #### Allocation Table | Service Departments | Operating Departments | | |---------------------|-----------------------|----------| | | | **Total**| | **Administration** | **Janitorial** | **Maintenance** | **Binding** | **Printing** | | | Departmental Costs Before Allocations | $154,
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