Question

Gill Corporation, a book publisher, has two service departments: editing and typesetting. Gill also has three operating departments: children’s fiction, youth fiction, and adult fiction. The annual costs of operating the editing department are $360,000 and the annual costs of operating the typesetting department are $180,000. Gill uses the direct method to allocate service center costs to operating departments. Other relevant data follow.


Required
a. Allocate the service center costs to the operating departments using the number of pages as the cost driver.
b. Allocate the service center costs to the operating departments using the number of hours as the costdriver.


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  • CreatedFebruary 07, 2014
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