Cerce Corporation Uses the Direct Method to Allocate Service Department

question 9

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.

---

Definitions:

Coke

A carbonated soft drink that has become a globally recognized brand, or alternatively, a fuel derived from coal.

Quantity Demanded

The amount of a product consumers are willing and able to purchase at a specific price.

Law of Demand

A fundamental principle in economics that describes the inverse relationship between the price of a good or service and the quantity demanded by consumers, holding other factors constant.

Quantity Demanded

The aggregate quantity of a product or service buyers are prepared to buy at a certain price point, within a specific timeframe.