Question

Jamison Company has two service departments and two producing departments. Square footage of space occupied by each department follows: Custodial services 2,600 feet General administration 4,600 feet Producing Department A 9,600 feet Producing Department B 9,600 feet 26,400 feet The department costs of Custodial Services are allocated on a basis of square footage of space. If Custodial Services costs are budgeted at $54,000, the amount of cost allocated to General Administration under the direct method would be:

Answer 1

Answer:

$0

Explanation:

Under the direct method of cost allocation, each and every service department cost would be distributed to the producing department that depend upon the square footage of space. Also the service of service department would be used by the other service department would not be considered.

So here the custodial service cost would be distributed to the producing department A and producing department b and no cost would be distributed to the general admin department

Hence, the $0 would be allocated