Allocate service department costs to operating departments

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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

25,000

Space occupied- - square feet

8,500

1,170

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.

Reference no: EM132448608

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