Question

pter 04 Pre-Built Problems Helps Seattle Western University has provided the following data to be used in its service department cost allocations: Service Departments Facility Administration Services $2,400,000 $1,600,000 Departmental costs before allocations Student credit hours Space occupied square feet Operating Departments Undergraduate Graduate Programs Programs $26,800,000 $5,700,000 20,000 5.000 70,000 30.000 25,000 10,000 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.) ences Service Departments Facility Administration Services Operating Departments Undergraduate Graduate Programs Programs $ 26,800,000 $ 5.700,000 Total $ 36,500,000 $ 2.400.000 $ 1,600,000 Departmental costs before allocations Allocations: Administration costs Facility services costs Total costs after allocation

Answer 1

	Service Departments		Operating Departments
	Administration	Facility Services	Undergraduate programs	Graduate programs	Total
Departmental costs before allocations	2400000	1600000	26800000	5700000	36500000
Allocations:
Administration costs	-2400000	0	1920000	480000	0
Facility Services costs	0	-1600000	1120000	480000	0
Total costs after allocation	0	0	29840000	6660000	36500000

Workings:
Administration costs:
Undergraduate programs	1920000	=2400000/(20000+5000)*20000
Graduate programs	480000	=2400000/(20000+5000)*5000
Facility Services costs:
Undergraduate programs	1120000	=1600000/(70000+30000)*70000
Graduate programs	480000	=1600000/(70000+30000)*30000