Question

Seattle Westem University has provided the following data to be used in its service department cost allocation $2,400,000 Graduate Programs 55,700,000 .000 $1,600,000 loun 10 Undergraduate Programs $26,800, 20.000 70.000 Departmental costs before allocations Student credit hours Seace occupied scare feet 25.01 10,000 e. 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 Department F act Ad Operating Departments Undergraduate Graduate Programs $ 26,600,000 $ 5.700 000 Total $ 36 500 000 $ 2,400.000 $ 1.600 000 Departmental costs before allocations Allocations Administration costs Facility services

Answer 1

--Requirement

	Administration	Facility Services	Undergraduate Programs	Graduate Programs	Total
Department costs before allocations	$2,400,000	$1,600,000	$26,800,000	$5,700,000	$36,500,000
Allocations:
Administration cost	($2,400,000)		$1,920,000	$480,000	$0
Facility Service Costs		($1,600,000)	$1,120,000	$480,000	$0
Total Costs after allocation	$0	$0	$29,840,000	$6,660,000	$36,500,000

--Working

	Administration	Facility Services	Undergraduate Programs	Graduate Programs
Department costs before allocations	2400000	1600000	26800000	5700000
Allocations:
Administration cost	-2400000		=2400000*20000/25000	=2400000*5000/25000
Facility Service Costs		-1600000	=1600000*70000/100000	=1600000*30000/100000