Question

Required information The following information applies to the questions displayed below.] Gipps Business College (GBC) has two degree programs, undergraduate (UG) and graduate (GRAD) and three service departments, information technology (IT), Event Planning (EP), and Career Services (CS). The CFO of GBC is conducting a profitability analysis of the two programs and wants to include the appropriate costs of the service departments in the costs of the two degree programs. As a part of the analysis, the CFO has collected the following usage patterns of the service departments over the last two years. Supplying Department EP Using Department CS 20% 25% IT 10% EP UG 40% 25% 60% TBD* GRAD 30% 50% 40% TBD* CS Direct cost $182,000 $138,000 $ 244,000 *To Be Determined c. Allocate the costs using the step method starting with CS, followed by EP and then IT. (Do not round intermediate calculations. Negative amounts should be indicated by a minus sign.) IT EP CS UG GRAD Department costs CS allocation EP allocation IT allocation Total costs allocated

Answer 1

Allocation

	IT	EP	CS	UG	GRAD
Department Costs	182000	138000	244000
CS Allocation			-244000	146400	97600
EP Allocation		-138000		46000	92000
IT Allocation	-182000			104000	78000
Total Cost allocated	0	0	0	296400	267600