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Problem - 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
$31,480
$38,315
$125,580
$417,650
Employee hours
3,500
1,170
25,000
Space occupied- - square feet
8,500
46,000
2,500
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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