Seattle Western University has provided the following data to be used in its ser

Question

Seattle Western University has provided the following data to be used in its service department cost allocations: Service Departments Operating Departments Administration Facility Services Undergraduate Programs Graduate Programs Departmental costs before allocations $2,400,000 $1,600,000 $26,800,000 $5,700,000 Student credit-hours 20,000 5,000 Space occupied—square feet 25,000 10,000 70,000 30,000 Required: Using the direct method, allocate the costs of the service departments to the two operating departments. Allocate the Administration cost on the basis of student credit-hours and the Facility Services cost on the basis of space occupied. (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.)

Explanation / Answer

Service departments operating deparments total Adminis Facility UG Graduate services programs programs Departmental costs before allocation 2,400,000 1,600,000 26,800,000 5,700,000 36,500,000.0 Allocationa: administration (4:1) -2,400,000 1920000 480000 Facility services (7:3) -1,600,000 1120000 480000 total cost after allocation 0 0 29,840,000 6,660,000 36,500,000

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