Cerce Corporation uses the direct method to allocate service department costs to operating departments. The...
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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. Service Department Operating Department Administrative Facilities Assembly Finishing Departmental costs $ 30,800 $ 38,816 $ 125,870 $ 417,660 Employee hours 3,200 1,200 22,000 22,000 Space occupied--square feet 33,000 Administrative Department costs are allocated on the basis of employee hours and Facilities Department costs are allocated on the basis of space occupied. 8,200 1,200 2,200 Required: Allocate the service department costs to the operating departments using the direct method. Service Department Administrative Facilities Operating Department Assembly Finishing Total costs after allocation
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