SHOW WORKING Flinders Company has two service departments, Factory Administratio

Question

SHOW WORKING

Flinders

Company has two service departments, Factory Administration and

Maintenance, and two operating departments. Selected information

relating to these departments is given below:

Service Departments

Operating Departments

The

company allocates service department costs by the step-down method.

Factory Administration costs are allocated first on the basis of number

of employees, and then Maintenance costs are allocated on the basis of

total labor hours.

Prepare a schedule showing the allocation of service department costs to other departments. (Leave

no cells blank - be certain to enter "0" wherever required. Negative

amounts should be indicated by a minus sign. Do not round intermediate

calculations. Omit the "$" sign in your response.)

Service Departments

Operating Departments

Service Departments

Operating Departments

Factory
Administration Maintenance X Y   Departmental costs $ 143,000    $ 69,674 $ 701,000 $ 601,000   Number of employees 4    4 50 50   Total labor hours 4,100    6,100 50,000 60,000

Explanation / Answer

Service Departments Operating Departments Factory Administration Maintenance X Y Departmental costs $143000 $69674 $701000 $601000 Allocations: Factory Administration -143000 5500 68750 68750 Maintenance -75174 34170 41004 Total 0 0 $803920 $710754

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