Help me answer accounting question Seattle Western University has provided the f
ID: 2416603 • Letter: H
Question
Help me answer accounting question
Seattle Western University has provided the following data to be used in its service department cost allocations Service Departments Operating Departments Facility Undergraduate Graduate Administration Services Programs Programs Departmental costs before allocations 2,400,000 1,600,000 26,800,000 5,700,000 Student credit-hours 20,000 5,000 25,000 Space occupied square feet 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 costs of Administration on the basis of student credit-hours and Facility Services costs 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 Undergraduate Graduate Facility Administration Total Services Programs Programs Departmental costs before allocations 2,400,000 1,600,000 26,800,000 5.700.000 36,500,000 Allocations Administration costs Facility services costs Total overhead costs after allocationsExplanation / Answer
Details
Service Departments
Operating Department
Total
Administration
Facility Services
Undergraduate Programs
Graduate Programs
Departmental Cost before Allocation (a)
24,00,000
16,00,000
268,00,000
57,00,000
365,00,000.00
Allocations:
Facility Services Cost (b)
3,20,000
16,00,000
8,96,000
3,84,000
0.00
Administration Costs '(c)
27,20,000
-
21,76,000
5,44,000
Total Overhead Costs After Allocations (d=a+b+c)
-
-
298,72,000
66,28,000
365,00,000.00
Note: We have approached by firstly allocating FACILITY SERVICE COST over all the other three Sub-Heads in ,the ratio of Area Covered by the three sub-heads. After which, we allocated the Total Administrative Costs of 27,20,000 over Operating Department in the ratio of Student Credit Hours, thereby allocating the Service Department completely over Operating Department.
Details
Service Departments
Operating Department
Total
Administration
Facility Services
Undergraduate Programs
Graduate Programs
Departmental Cost before Allocation (a)
24,00,000
16,00,000
268,00,000
57,00,000
365,00,000.00
Allocations:
Facility Services Cost (b)
3,20,000
16,00,000
8,96,000
3,84,000
0.00
Administration Costs '(c)
27,20,000
-
21,76,000
5,44,000
Total Overhead Costs After Allocations (d=a+b+c)
-
-
298,72,000
66,28,000
365,00,000.00
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