Question

Madison Park Co-op, a whole foods grocery and gift shop, has provided the following data to be used in its service department cost allocations: Departmental costs before allocations Employee-hours Space occupied-square feet Service Departments Administration Janitorial $190,000 $70,000 490 330 800 1,100 Operating Departments Groceries Gifts $3,820,000 $330,000 2,720 150 9,100 900 Required: Using the step-down method, allocate the costs of the service departments to the two operating departments. Allocate Administration first on the basis of employee-hours and then Janitorial 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. Round your answers to the nearest whole dollar amount.) Service Departments Operating Departments Administration Janitorial Groceries Gifts $ 190,000 $ 70,000|$ 3,820,000 $ 330,000 Total 4,410,000 $ Departmental costs before allocations Allocation: Administration costs Janitorial costs Total costs after allocation (190,000) $ 0 $ 70,000 $ 3,820,000 $ 330,000 $ 4,220,000

Answer 1

Answer
	Administration	Janitorial	Groceries	Gifts	Total
	$	$	$	$	$
Departmental costs before allocation	$         190,000	$ 70,000	$3,820,000	$330,000	$4,410,000
Allocation
Administration costs	-$         190,000	$ 19,594	$   161,500	$    8,906	$   190,000
Janitorial costs	-	-$ 89,594	$     81,531	$    8,063	$     89,594
Total costs after allocation	-	-	$4,063,031	$346,970	$4,410,000

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