Madison Park Co-op, a whole foods grocery and gift 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 Administration first on the basis of employee-hours and then Janitorial on the basis of space occupied.

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Service Departments Administration Operating Departments Groceries Janitorial Gifts Departmental costs before allocations Employee-hours Space occupied-square feet $2,320,000 3,100 4,000 $150,000 $40,000 $950,000 740 320 160 100 1,000 250