Cerce Corporation Uses the Direct Method to Allocate Service Department

question 207

Essay

Cerce Corporation uses the direct method to allocate service department costs to operating departments. The company has two service departments, Administrative and Facilities, and two operating departments, Assembly and Finishing.
Administrative Department costs are allocated on the basis of employee hours and Facilities Department costs are allocated on the basis of space occupied. Required: Allocate the service department costs to the operating departments using the direct method.

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Definitions:

Neural Tube

The precursor to the central nervous system in embryonic development, which later develops into the brain and spinal cord.

Spinal Cord

A long, thin, tubular bundle of nervous tissue and support cells that extends from the brainstem to the lumbar region, facilitating communication between the brain and the body.

Genetic Counseling

Consultation and testing by trained experts that enable individuals to learn about their genetic heritage, including harmful conditions that they might pass along to any children they may conceive.

Prenuptial

A legal agreement made between two individuals before marrying, outlining the distribution of assets in the event of divorce or death.