Question

Chancellor Company is divided into four departments. Departments A and B are service departments and Departments 1 and 2 are operating (production) departments. The services of the two service departments are used by the other departments as follows:

Dept. A Dept. B Dept. 1 Dept. 2
Services of:



Department A............
50% 20% 30%
Department B............

40% 60%
Direct costs incurred by each department $60,000 $50,000 $70,000 $80,000

Complete the following table:

Allocation of Expenses to Departments

Department A
Department B
Department 1
Department 2
Total direct






Department expenses.. $60,000
$50,000
$ 70,000
$ 80,000
Service department expenses






Department A............






Subtotal........................




Department B............






Total.............................





Answer

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