Question: A, B, C & D State Financial Corp. has three service departments (Administration, Communications, and Facilities), and two production departments (Deposits and Loans). A summary
State Financial Corp. has three service departments (Administration, Communications, and Facilities), and two production departments (Deposits and Loans). A summary of costs and other data for each department prior to allocation of service department costs for the year ended December 31 follows. Direct costs Employee hours Number of employees Square footage occupied Administration $240.000 27,000 7 5,300 Communications $270,000 35,000 16 13,000 Facilities $258,00 18,500 5 5,600 Deposits Loans $8,880,000 $4,900,000 482,000 371,000 200 160 242,800 201,160 The costs of the service departments are allocated on the following bases: Administration, employee hours: Communications number of employees and Facilities, square footage occupled. Required: a. Assume that the bank elects to distribute service department costs to production departments using the direct method. What amount of Communications Department costs is allocated to the Deposits Department? b. Assume the same method of allocation as in requirement (a). What amount of Administration Department costs is allocated to the Loans Department? c. Assuming that the bank elects to distribute service department costs to other departments using the step method (starting with Facilities and then Communications), what amount of Facilities Department costs is allocated to the Communications Department? d. Assume the same method of allocation as in requirement (q. What amount of Communication Department costs is allocated to Facilities? Complete this question by entering your answers in the tabs below. Required A Required Required Required D Assume that the bank elects to distribute service department costs to production departments using the direct method. What
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