Bens Corporation has three service departments (Repairs, HR, and IT) and two production departments (M1 and M2). The following usage data for each of the service departments for the previous period follow. Repairs HR IT Repairs HR 0% Service department costs Repairs allocation HR allocation IT allocation Total costs allocated 10% 0% 10% IT 0% 20% The direct costs of the service departments in the previous period were $92,000 for Repairs, $111,600 for HR, and $207,000 for IT. Required: Use the direct method to allocate the service department costs to the production departments. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations.) M1 40% 35% 20% Repairs M2 60% 35% 70% HR IT M1 M2

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Bens Corporation has three service departments (Repairs, HR, and IT) and two production departments (M1 and M2). The following
usage data for each of the service departments for the previous period follow.
Repairs
HR
IT
Repairs HR
0%
Service department costs
Repairs allocation
HR allocation
IT allocation
Total costs allocated
10%
0%
-
10%
IT
0%
20%
The direct costs of the service departments in the previous period were $92,000 for Repairs, $111,600 for HR, and $207,000 for IT.
Required:
Use the direct method to allocate the service department costs to the production departments. (Negative amounts should be
indicated by a minus sign. Do not round intermediate calculations.)
M1
40%
35%
20%
Repairs
M2
60%
35%
70%
HR
IT
M1
M2
Transcribed Image Text:Bens Corporation has three service departments (Repairs, HR, and IT) and two production departments (M1 and M2). The following usage data for each of the service departments for the previous period follow. Repairs HR IT Repairs HR 0% Service department costs Repairs allocation HR allocation IT allocation Total costs allocated 10% 0% - 10% IT 0% 20% The direct costs of the service departments in the previous period were $92,000 for Repairs, $111,600 for HR, and $207,000 for IT. Required: Use the direct method to allocate the service department costs to the production departments. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations.) M1 40% 35% 20% Repairs M2 60% 35% 70% HR IT M1 M2
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