Exercise 4B-3 Step-Down Method [LO4-11]

The Ferre Publishing Company has three service departments and two operating departments. Selected data from a recent period on the five departments follow:

	Service Departments			Operating Departments
	Administration	Janitorial	Maintenance	Binding	Printing	Total
Costs	$95,000	$70,000	$35,000	$246,000	$495,000	$941,000
Number of employees	147	105	420	1,050	525	2,247
Square feet of space occupied	5,100	20,400	17,000	34,000	119,000	195,500
Hours of press time				15,000	32,000	47,000

The company allocates service department costs by the step-down method in the following order: Administration (number of employees), Janitorial (space occupied), and Maintenance (hours of press time).

Required:

Using the step-down method, allocate the service department costs to the operating departments. (Please enter allocations from a department as negative and allocations to a department as positive. The line should add across to zero. Do not round intermediate calculations. Round your answers to the nearest dollar amount.)2