Boston Corporation has two production Departments: Assembly and Machining and two service departments: Personnel and Cafeteria.Direct costs for each department and the proportion of service costs used by the various departments for the month of July,2016 are as follows:
Required:
Compute the allocation of service department costs to producing departments for July,2016 using the step-method.
Definitions:
Coupon Rate
The interest rate stipulated on a bond or fixed-income security that the issuer pays to the holders periodically until maturity.
Current Yield
The annual income (interest or dividends) divided by the current price of the security, expressed as a percentage.
Yield to Maturity
The total return anticipated on a bond if held until it matures, including both interest payments and the appreciation or depreciation of the bond's value.
Coupon Rate
The interest rate stated on a bond or other fixed income security that the issuer promises to pay annually or semi-annually.
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