Question

Seattle Western University has provided the following data to be used in its service department cost allocations: Service Departments Operating Departments Facility Administration Services Programs Programs Departmental costs before allocations Student credit-hours Space occupied-square feet $2,400,000 $1,600,000 $26,800,000 $5,700,000 5,000 30,000 20,000 70,000 25,000 10,000 Required: Using the direct method, allocate the costs of the service departments to the two operating departments. Allocate the Administration cost on the basis of student credit-hours and the Facility Services cost on the basis of space occupied. (Please enter allocations from a department as negative and allocations to a department as positive. The line should add across to zero. Do not round intermediate calculations.) Service Departments Operating Departments Facility Administration Services Undergraduate Graduate rams Total rams Departmental costs before allocations 2,400,000 1,600,000 26,800,000$ 5,700,000 36,500,000 Allocations Administration costs Facility services costs Total costs after allocation $ 2,400,000$ 1,600,000$ 26,800,000$ 5,700,000$ 36,500,000

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		-1600000	1120000	480000	0
Total costs after allocations:	0	0	29840000	6660000	36500000
Workings:
Administration costs:
Undergraduate Programs	=2400000/25000*20000
Graduate Programs	=2400000/25000*5000
Facility services costs:
Undergraduate Programs	=1600000/100000*70000
Graduate Programs	=1600000/100000*30000