If we assume for the moment that lis management wants

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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: Production Center Mowing Special Projects Total Direct Costs 73,575 47,000 Allocated Costs Total Maintenance Administration Costs 17,000 30,250 $120,825 11,000 21,175 79,175 $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...
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