Mackenzie Mining has two operating divisions, Northern and Southern, that share the common costs of the company's human resources (HR) department. The annual costs of the HR department total $15,000,000 a year. You have the following selected information about the two divisions: Northern Southern Number of Employees 2,365 1,935 Wage and Salary Expense ($000) $ 179,800 110, 200 Required: a. What is the HR cost that is charged to each division if the number of employees is used as the allocation basis? b. What is the HR cost that is charged to each division if the wage and salary expense total is used as the allocation basis?

Mackenzie Mining has two operating divisions, Northern and Southern, that share the common costs of the company's human resources (HR) department. The annual costs of the HR department total $15,000,000 a year. You have the following selected information about the two divisions: Northern Southern Number of Employees 2,365 1,935 Wage and Salary Expense ($000) $ 179,800 110, 200 Required: a. What is the HR cost that is charged to each division if the number of employees is used as the allocation basis? b. What is the HR cost that is charged to each division if the wage and salary expense total is used as the allocation basis?

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter4: Accounting For Factory Overhead

Section: Chapter Questions

Problem 9E: A manufacturing company has two service and two production departments. Human Resources and Machine...

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