Steven Parker owns and operates Steven's Septic Service and Legal Advice. Steven's two revenue generating (production) operations are supported by two service departments: Clerical and Janitorial. Costs in the service departments are allocated in the following order using the designated allocation bases:

Clerical:

Variable cost: expected number of work orders processed.
Fixed cost: long-run average number of work orders processed.

Janitorial:

Variable cost: labor hours.
Fixed cost: square footage of space occupied.
Average and expected activity levels for next month (June) are as follows:

	No. of Work Orders
	Expected	Average	Labor Hours	Square Footage
Septic Service	45	80	710	1,950
Legal advice	30	25	990	2,350
Clerical	20	20	550	1,750
Janitorial	5	15	350	1,150

Expected costs in the service departments for June are as follows:

	Clerical			Janitorial
Variable costs	$	14,000		$	5,700
Fixed costs	$	9,900		$	950

Under the step method of allocation, how much Clerical Service cost should be allocated to the Septic Service operation for June? (Assume Clerical costs are allocated before Janitorial costs and round all calculations to the nearest whole dollar.)

rev: 08_19_2019_QC_CS-174994

• $14,988.

• $14,475.

• $15,145.

• $18,795.

Answer rating: 100% (QA)

Total expected number of work orders processed other than Clerical Service 45305 80 Clerical serv... View the full answer