Salado Inc. provides cleaning services through its Residential and Commercial divisions. Support services of the company...

 

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Salado Inc. provides cleaning services through its Residential and Commercial divisions. Support services of the company are provided by Personnel and Administration areas. Costs of these two areas are allocated to the revenue producing departments. Personnel costs are allocated using number of employees; administration costs are allocated using direct department costs. The following annual budgeted information (presented in a benefits- provided ranking) is available: Personnel Administration Residential Commercial Direct costs $224,000 Number of employees 19 Direct labor hours Square feet cleaned $288,000 $768,000 $1,280,000 48 115 96,000 720,000 77 144,000 912,000 a. Using the direct method, allocate the costs of Personnel and Administration to the Residential and Commercial divisions. Note: Do not round proportions; round your final answer to the nearest whole dollar. Total support costs allocated to Residential = Total support costs allocated to Commercial = $ b. Using the step method, allocate the costs of Personnel and Administration to the Residential and Commercial divisions. Note: Do not round proportions; round your final answer to the nearest whole dollar. Total support costs allocated to Residential = $ Total support costs allocated to Commercial = $ c. Salado prices jobs by the direct labor hour for Residential services and by the square foot cleaned for Commercial services. Compute the full cost of providing one direct labor hour of service for Residential and for one square foot cleaned for Commercial using (1) the direct method and (2) the step method. Note: Round your answers to two decimal places (i.e. round $4.555 to $4.56). (1) Direct Method Residential cost per hour of service $ Commercial cost per square foot cleaned $ (2) Step Method Residential cost per hour of service $ A A Commercial cost per square foot cleaned $ Salado Inc. provides cleaning services through its Residential and Commercial divisions. Support services of the company are provided by Personnel and Administration areas. Costs of these two areas are allocated to the revenue producing departments. Personnel costs are allocated using number of employees; administration costs are allocated using direct department costs. The following annual budgeted information (presented in a benefits- provided ranking) is available: Personnel Administration Residential Commercial Direct costs $224,000 Number of employees 19 Direct labor hours Square feet cleaned $288,000 $768,000 $1,280,000 48 115 96,000 720,000 77 144,000 912,000 a. Using the direct method, allocate the costs of Personnel and Administration to the Residential and Commercial divisions. Note: Do not round proportions; round your final answer to the nearest whole dollar. Total support costs allocated to Residential = Total support costs allocated to Commercial = $ b. Using the step method, allocate the costs of Personnel and Administration to the Residential and Commercial divisions. Note: Do not round proportions; round your final answer to the nearest whole dollar. Total support costs allocated to Residential = $ Total support costs allocated to Commercial = $ c. Salado prices jobs by the direct labor hour for Residential services and by the square foot cleaned for Commercial services. Compute the full cost of providing one direct labor hour of service for Residential and for one square foot cleaned for Commercial using (1) the direct method and (2) the step method. Note: Round your answers to two decimal places (i.e. round $4.555 to $4.56). (1) Direct Method Residential cost per hour of service $ Commercial cost per square foot cleaned $ (2) Step Method Residential cost per hour of service $ A A Commercial cost per square foot cleaned $