Question

Seattle Western University has provided the following data to be used in its service department cost allocations:

	Service Departments			Operating Departments
	Administration	Facility Services		Undergraduate Programs	Graduate Programs
Departmental costs before allocations	$2,400,000	$1,600,000		$26,800,000	$5,700,000
Student credit-hours				20,000	5,000
Space occupied—square feet	25,000	10,000		70,000	30,000

Required:

Using the direct method, allocate the costs of the service departments to the two operating departments. Allocate the Administration cost on the basis of student credit-hours and the Facility Services cost on the basis of space occupied. (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.)

Answer 1