Books and Java, a book store and coffee shop, has provided the following data to be used in its service department cost allocations:

Required:
Using the step-down method, allocate the costs of the service departments to the two operating departments. Allocate the costs of the Administration Department first on the basis of employee-hours and then on the costs of the Cleaning Services Department on the basis of space occupied.

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Departmental costs before allocations ... Employee-hours ..... Space occupied in square metres....... Service Departments Administration Cleaning $300,000 640 500 $80,000 320 100 Operating Departments Book Store $4,640,000 6,200 4,000 Coffee Shop $1,900,000 1,480 1,000