Question

12-7: Xancar Corporation has three factories, and allocates the costs of two service departments to these factories using the Direct Method of service department cost allocation. The table below shows the costs incurred by these two service departments for the most recent year, the allocation base used to allocate the costs of each department, and the amount of the allocation base incurred by the factories and service departments.

	Costs incurred	Allocation base	Accounting & Computing	Human Resources	Factory in Zancobar	Factory in Yebasta	Factory in Quinzotet
Accounting & Computing	$850,000	Operating costs	$850,000	$930,000	$1,200,000	$1,100,000	$1,700,000
Human Resources	$930,000	Number of employees	45	33	110	75	145

Required: Calculate service department costs allocated to each factory.

Answer 1

	Accounting & Computing	Human Resources	Factory in Zancobar	Factory in Yebasta	Factory in Quinzotet
Costs incurred	850000	930000
Allocation of Accounting & Computing costs	-850000		255000	233750	361250
Allocation of Human Resources costs		-930000	310000	211364	408636
Total service department costs allocated $			565000	445114	769886

Kindly round off as required since no instructions have been provided with the question regarding rounding off.