Alice Gibbons owns and operates Alice's Abstracting Service. Alice's two revenue generating operations are supported by two service departments: Clerical and Custodial. Costs in the service departments are allocated in the following order using the designated allocation bases.
Clerical: number of transactions processed.Custodial: square footage of space occupied
Average and expected activity levels for next month are as follows:# of Transactions Square Footage Expected Costs
- Abstract Services 50 1800
- Closing Services 2200
- Clerical 25 1600 $40,000
- Custodial 5 $10,000
Required: Use the direct method to allocate the service department costs to the revenue generating departments. Provide the total costs for the revenue departments.