Woodstock Binding has two service departments, IT (Information Technology) and HR (Human Resources), and two operating departments, Publishing and Binding. Management has decided to allocate IT costs on the basis of IT Tickets (issued with each IT request) in each department and HR costs on the basis of employees in each department. The following data appear in the company records for the current period: IT HR Publishing Binding IT tickets 0 1,500 2,400 2,100 Employees 16 0 24 40 Department direct costs $150,000 $247,500 $430,000 $390,000 Required: Use the direct method to allocate these service department costs to the operating departments. Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations. Round "Publishing" and "Binding" answers to 2 decimal places. IT HR Publishing Binding Service Department Costs IT Allocation HR Allocation Total Costs Allocated $ $ $ $
Woodstock Binding has two service departments, IT (Information Technology) and HR (Human Resources), and two operating departments, Publishing and Binding. Management has decided to allocate IT costs on the basis of IT Tickets (issued with each IT request) in each department and HR costs on the basis of employees in each department. The following data appear in the company records for the current period: IT HR Publishing Binding IT tickets 0 1,500 2,400 2,100 Employees 16 0 24 40 Department direct costs $150,000 $247,500 $430,000 $390,000 Required: Use the direct method to allocate these service department costs to the operating departments. Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations. Round "Publishing" and "Binding" answers to 2 decimal places. IT HR Publishing Binding Service Department Costs IT Allocation HR Allocation Total Costs Allocated $ $ $ $
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter7: Allocating Costs Of Support Departments And Joint Products
Section: Chapter Questions
Problem 30E: A company uses charging rates to allocate service department costs to the using departments. The...
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Woodstock Binding has two service departments, IT (Information Technology) and HR (Human Resources), and two operating departments, Publishing and Binding. Management has decided to allocate IT costs on the basis of IT Tickets (issued with each IT request) in each department and HR costs on the basis of employees in each department.
The following data appear in the company records for the current period:
| IT | HR | Publishing | Binding | |
| IT tickets | 0 | 1,500 | 2,400 | 2,100 |
| Employees | 16 | 0 | 24 | 40 |
| Department direct costs | $150,000 | $247,500 | $430,000 | $390,000 |
Required:
Use the direct method to allocate these service department costs to the operating departments.
Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations. Round "Publishing" and "Binding" answers to 2 decimal places.
| IT | HR | Publishing | Binding | |
|
Service Department Costs |
||||
| IT Allocation | ||||
| HR Allocation | ||||
|
Total Costs Allocated |
$ | $ | $ | $ |
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