SB Exercise 4B-3 through Exercise 4B-4 (Algo)

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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	$158,200	$118,650	$54,240		$310,750	$485,900	$1,127,740
Number of employees	60	35	140		315	210	760
Square feet of space occupied	15,000	10,000	20,000		40,000	100,000	185,000
Hours of press time					30,000	60,000	90,000

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

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.)