Refer to Exercise 8.26. Assume that Staffordshire Brothers uses the step-down method.
Exercise 8.26

REQUIRED
A. Starting with payroll/tax reporting services, calculate the costs to be allocated to the pet store and the pet grooming business. Assuming that the above costs are for one year, what are the monthly costs charged to the pet store and the pet grooming business?
B. Starting with custodial services, calculate the costs to be allocated to the pet store and the pet grooming business. Assuming that the above costs are for one year, what are the monthly costs charged to these businesses?

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Payroll/Tax Reporting Services Custodial Services Pet Store Grooming $72,000 $90,000 $60,000 $40,000 Direct costs # employees Space occupied (m2) 1,000 1,000 3,0005,000