Cerce Corporation uses the direct method to allocate service department costs to operating departments. The...
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Accounting
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
8,200
1,200
33,000
2,200
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.
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