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

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 operatingdepartments.

Transcribed Image Text:

Service Departments Operating Departments Administration Printing Maintenance Janitorial Binding Total $140,000 $105,000 $48,000 $430,000 $275,000 $998,000 Costs Number of employees 760 60 35 315 210 140 100,000 Square feet of space occupied 15,000 10,000 20,000 40,000 185,000 90,000 Hours of press time 30,000 60,000