FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Exercise 12-35 (Algo) Alternative Allocation Bases (LO 12-5)
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 $33,000,000 a year. You have the following selected
information about the two divisions:
Northern
Southern
Number of Wage and Salary
Expense ($000)
$ 291,400
178,600.
Employees
3,355
2,745
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?
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Transcribed Image Text:Exercise 12-35 (Algo) Alternative Allocation Bases (LO 12-5) 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 $33,000,000 a year. You have the following selected information about the two divisions: Northern Southern Number of Wage and Salary Expense ($000) $ 291,400 178,600. Employees 3,355 2,745 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?
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