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: Operating Departnents Facility Undergraduate Graduate Programs Service Departments Administration Services Programs Departnental costs before allocations Student eredit-hours Space occupied-square feet $2,400,000 $1,600,000$26, 800,000$5,700,000 5,000 30,000 20,000 70,000 25,000 10,000 Book Print erences 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.) Service Departments Operating Departments Administration Undergraduate Graduate Total Departmental costs before allocations 2400,00 1,600,000 ProgramsPrograms 26,800,000 6,700,000 $ 36,500,000 Administration costs Facility services costs Total costs after allocation

Explanation / Answer

Cost Allocation :-

Administration Cost :-

Undergraduate = $2400000*(20/25) = $1920000

Graduate = $2400000*(5/25) = $480000

Facility Services Cost :-

Undergraduate = $1600000*(70/100) = $1120000

Graduate = $1600000*(30/100) = $480000

Particulars Administration Facility Services Undergraduate Programs Graduate Programs Total Departmental Costs Before Allocations $2400000 $1600000 $26800000 $5700000 $36500000 Allocations :- Administration Costs (20/25, 5/25) (2400000) 1920000 480000 Facility Services Costs (1600000) 1120000 480000 Total Costs After Allocation $0 $0 $29840000 $6660000 $36500000

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