I am not sure if I am doing this right. Please help me! Okanagan College has pro

Question

I am not sure if I am doing this right. Please help me!

Okanagan College has provided the following data to be used in its service department cost allocations Service Departments Operating Departments Physical Plant Undergraduate Graduate Programs Administration $1,500,000 2,500 Services $654,000 750 Programs Departmental costs before allocations $32,650,000 40,000 $1,890,000 10,000 Student credit hours Space occupied in square 25,000 5,000 metres Required. Using the direct method, allocate the costs of the service departments to the two operating departments Allocate the costs of the Administration Department based on student credit hours and the costs of the Physical Plant Services Department based on space occupied. (Negative amounts should be indicated by a minus sign.) Service Departments Operating Departments Programs 32,650,000 Graduate Programs 1,890,000 S 36,694,000 Administration Physical Plant Undergraduate Total Services Departmental costs before allocations ,500,000 Allocations 654,000 Administration costs Physical Plant costs Total costs after allocation 300,000 109,000 1,200,000 545,000 $1,500,000 654,000 $34,395,000 2,299,000 36,694,000

Explanation / Answer

Service Department Operating Departments physical undergrat Graduate total Administration plnt service programs programs Departmental costs before allocations 1,500,000 654,000 32,650,000 1,890,000 36,694,000 allocations: Administration costs (4:1) -1,500,000 1200000 300000 0 physical plant costs (5:1) -654,000 545000 109,000 0 total costs after allocation 0 0 34,395,000 2,299,000 36,694,000

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