Service Department Cost Allocation - Anna Lee
Service Department Cost Allocation - Anna Lee
Service Department Cost Allocation - Anna Lee
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LO3<strong>Cost</strong> <strong>Allocation</strong>: Step Method<strong>Service</strong> <strong>Department</strong> <strong>Cost</strong> <strong>Allocation</strong>Direct<strong>Cost</strong>(S1)Percent Applicable to(S2)(P1)(P2)Total<strong>Service</strong> Dept.:(S1)(S2)$ 800,0005,000,0000.0%0.0%50.0% a0.0%10.0% b62.5% d40.0% c37.5% e100.0%100.0%a50.0% = 100,000 hours ÷ (100,000 hours + 20,000 hours + 80,000 hours)b10.0% = 20,000 hours ÷ (100,000 hours + 20,000 hours + 80,000 hours)c40.0% = 80,000 hours ÷ (100,000 hours + 20,000 hours + 80,000 hoursd62.5% = 5,000 employees ÷ (5,000 employees + 3,000 employees)e37.5% = 3,000 employees ÷ (5,000 employees + 3,000 employees)11 - 9
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