Question: CERCE Corporation uses the direct method to allocate Service department costs to operating departments. The company has two service departments, Administrative and Facilities, and two operating departments, Assembly and Finishing.
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Service Department
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Operating Department
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|
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Administrative
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Facilities
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Assembly
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Finishing
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Departmental costs
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$31,480
|
$38,315
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$125,580
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$417,650
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Employee hours
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3,500
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1,170
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25,000
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25,000
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Space occupied- - square feet
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8,500
|
1,170
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46,000
|
2,500
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Administrative Department costs are allocated on the basis of Employee hours and Facilities Department costs are allocated on the basis of space occupied.
Required: Allocate the service department costs to the operating departments using the direct method? Please show all work, the ratios are the hardest part for me to understand how to calculate.
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