This preview shows page 1. Sign up to view the full content.
Unformatted text preview: erve what happens. The allocated costs will not total $51,425, meaning that you will not have
fully allocated the Administration costs to the receiving cost centers.
Final Step. The final step in this stage of the cost accounting effort is to determine the cost of each production
centers, as follows:
47,000 Allocated Costs
$200,000 Note that our total costs of $200,000 remain the same as they were prior to the allocation of service center
costs. However, we now have fully allocated the service center costs (Maintenance and Administration) to the two
production centers. We did so by first allocating the Maintenance service center costs to the Administration service
center as well as to the two production centers, and then allocating the Administration service center costs (with its
maintenance allocation included) to the two production cente...
View Full Document
- Spring '14