Baldwin Enterprises has two service departments, Personnel and Legal, and two operating divisions, Eastern and Western. Personnel costs are allocated on the basis of employees and Legal costs are allocated on the basis of hours. A summary of Baldwin operations follows: Employees Hours Department direct costs Required: Personnel Legal Eastern Western 40 120 40 10,800 $ 340,000 5,400 $ 200,000 $ 1,240,000 1,800 $830,000 a. Allocate the cost of the service departments to the operating divisions using the direct method. b. Allocate the cost of the service departments to the operating divisions using the step method. Start with Legal. c. Allocate the cost of the service departments to the operating divisions using the reciprocal method. Complete this question by entering your answers in the tabs below. Required A Required B Required C Allocate the cost of the service departments to the operating divisions using the direct method. Note: Amounts to be deducted should be indicated by a minus sign. Department costs Personnel allocation Legal allocation Total costs Personnel Legal Eastern Western $ $ 0 $ 0 $ 0 < Required A Required B >

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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am. 116.

Baldwin Enterprises has two service departments, Personnel and Legal, and two operating divisions, Eastern and Western. Personnel
costs are allocated on the basis of employees and Legal costs are allocated on the basis of hours. A summary of Baldwin operations
follows:
Employees
Hours
Department direct costs
Required:
Personnel
Legal
Eastern
Western
40
120
40
10,800
$ 340,000
5,400
$ 200,000
$ 1,240,000
1,800
$830,000
a. Allocate the cost of the service departments to the operating divisions using the direct method.
b. Allocate the cost of the service departments to the operating divisions using the step method. Start with Legal.
c. Allocate the cost of the service departments to the operating divisions using the reciprocal method.
Complete this question by entering your answers in the tabs below.
Required A Required B
Required C
Allocate the cost of the service departments to the operating divisions using the direct method.
Note: Amounts to be deducted should be indicated by a minus sign.
Department costs
Personnel allocation
Legal allocation
Total costs
Personnel
Legal
Eastern
Western
$
$
0
$
0 $
0
< Required A
Required B >
Transcribed Image Text:Baldwin Enterprises has two service departments, Personnel and Legal, and two operating divisions, Eastern and Western. Personnel costs are allocated on the basis of employees and Legal costs are allocated on the basis of hours. A summary of Baldwin operations follows: Employees Hours Department direct costs Required: Personnel Legal Eastern Western 40 120 40 10,800 $ 340,000 5,400 $ 200,000 $ 1,240,000 1,800 $830,000 a. Allocate the cost of the service departments to the operating divisions using the direct method. b. Allocate the cost of the service departments to the operating divisions using the step method. Start with Legal. c. Allocate the cost of the service departments to the operating divisions using the reciprocal method. Complete this question by entering your answers in the tabs below. Required A Required B Required C Allocate the cost of the service departments to the operating divisions using the direct method. Note: Amounts to be deducted should be indicated by a minus sign. Department costs Personnel allocation Legal allocation Total costs Personnel Legal Eastern Western $ $ 0 $ 0 $ 0 < Required A Required B >
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