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Accounting

Alice Gibbons owns and operates Alice's Abstracting Service. Alice's two revenue generating operations are supported by two service departments: Clerical and Custodial. Costs in the service departments are allocated in the following order using the designated allocation bases.
Clerical: number of transactions processed.Custodial: square footage of space occupied

Average and expected activity levels for next month are as follows:# of Transactions Square Footage Expected Costs

Abstract Services 50 1800
Closing Services 2200
Clerical 25 1600 $40,000
Custodial 5 $10,000

Required: Use the direct method to allocate the service department costs to the revenue generating departments. Provide the total costs for the revenue departments.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9966424

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