Question

Madison Park Co-op, a whole foods grocery and gift shop, has provided the following data to be used in its service department cost allocations: Service Departments Operating Departments Administration Janitorial Groceries Gifts Departmental costs before allocations $200,000 $50,000 $3,850,000 $330,000 Employee-hours 470 330 2,720 150 Space occupied square feet 900 1,100 9,100 900 Required: Using the step-down method, allocate the costs of the service departments to the two operating departments. Allocate Administration first on the basis of employee-hours and then Janitorial on the basis of space occupied.

          Madison Park Co-op, a whole foods grocery and gift shop, has provided the following data to be used in its service department cost allocations:
                                                                                Service Departments                     Operating Departments                
                                                                               Administration        Janitorial          Groceries                     Gifts
Departmental costs before allocations                $200,000         $50,000         $3,850,000         $330,000    
Employee-hours                                                  470              330                 2,720                  150    
Space occupied square feet                         900              1,100                 9,100                  900  
Required:
Using the step-down method, allocate the costs of the service departments to the two operating departments. Allocate Administration first on the basis of employee-hours and then Janitorial on the basis of space occupied.

Added by Hugo G.

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