Alright, so this is how I calculated the problem. With the step method you have to allocate costs between service depts first. Then you allocate to the schools. Look for the service dept that provides more services (maintenance). Allocate 20% of the 99,000 maintenance costs from maintenance to power (19,800). So new costs are as follows. Maintenance; 99,000-19,800=79,200 and power; 54,000+19,800=73,800. Finish allocating maintenance costs. Scool of education gets 29,700 of the maintenance costs ((3/8)*79,200) and school of tech gets 49,500 ((5/8)*79,200). Now, allocate the power costs. The key point to remember is that you cannot allocate costs back to maintenance from power because the problem would never end. Just allocate the power costs between the two schools. School of Educ gets 16,400 of the power costs ((2/9)*73,800) and school of tech gets 57,400 of the power costs ((7/9)*73,800). Check to make sure all of your costs add up in the end. School of Education gets 46,100 of the total costs (29,700 +16,400) and school of tech gets 106,900 of the total costs (49,500+57,400). 46,100+106,900=153,00 which is equal to yiur original costs.
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