Solution-Determine the service department costs

Determine the service department costs

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Reference no: EM133190144

Question - Pauline's Hospital has two service departments, Administration and Maintenance, and two operating departments, Nursing and Laboratory. Information on annual costs and allocation bases follows:

	Service Departments		Operating Departments
	Administration	Maintenance	Nursing	Laboratory
Direct costs	P1,200,000	P400,000	P8,000,000	P800,000
Number of square feet	5,000	-	60,000	15,000
Direct labor hours	-	10,000	40,000	10,000

Required -

1. Determine the service department costs allocated to the two operating departments using the direct method.

2. Determine the service department costs allocated to the two operating departments using the step-down method. Allocate the Maintenance department costs first.

Reference no: EM133190144

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Determine the service department costs

Reference no: EM133190144

Reference no: EM133190144

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