Goldfarb's Book and Music Store has two service departments, Warehouse and Data Center. Warehouse Department costs of $300,000 are allocated on the basis ofbudgeted warehouse - hours. Data Center Department costs of $120,000 are allocated based on the number of computer log - on hours. The costs of operatingdepartments Music and Books are $105,000 and $126,000, respectively. Data on budgeted warehouse - hours and number of computer log - on hours are as follows:Support DepartmentsProduction DepartmentsWarehouseData CenterMusicBooksDepartment$300,000Department$120,000Budgeted costsBudgeted warehouse - hoursNumber of computer hours$105,0001,060$126,000NA5601,520210NA8601,100Using the step - down method, what amount of Warehouse Department cost will be allocated to Department Music if the service department with the highestpercentage of interdepartmental support service is allocated first? (Do not round any intermediary calculations.).....O A. $35,446O B. $40,510O C. $101,274O D. $123,256

Step down method: In this method costs are allocated according to the steps. Costs are first…

Goldfarb's Book and Music Store has two service departments, Warehouse and Data Center. Warehouse Department costs of $300,000 are allocated on the basis of budgeted warehouse-hours. Data Center Department costs of $120,000 are allocated based on the number of computer log- on hours. The costs of operating departments Music and Books are $105,000 and $126,000, respectively. Data on budgeted warehouse - hours and number of computer log - on hours are as follows: Support Departments Warehouse Department $300,000 Production Departments Data Center Music Books Department $120,000 Budgeted costs Budgeted warehouse - hours Number of computer hours $105,000 $126,000 1,520 NA 560 1,060 210 NA 860 1,100 Using the step- down method, what amount of Warehouse Department cost will be allocated to Department Music if the service department with the highest percentage of interdepartmental support service is allocated first? (Do not round any intermediary calculations.) O A. $35,446 OB. $40,510 OC. $101,274 O D. $123,256

Goldfarb's Book and Music Store has two service departments, Warehouse and Data Center. Warehouse Department costs of $300,000 are allocated on the basis of budgeted warehouse-hours. Data Center Department costs of $120,000 are allocated based on the number of computer log- on hours. The costs of operating departments Music and Books are $105,000 and $126,000, respectively. Data on budgeted warehouse - hours and number of computer log - on hours are as follows: Support Departments Warehouse Department $300,000 Production Departments Data Center Music Books Department $120,000 Budgeted costs Budgeted warehouse - hours Number of computer hours $105,000 $126,000 1,520 NA 560 1,060 210 NA 860 1,100 Using the step- down method, what amount of Warehouse Department cost will be allocated to Department Music if the service department with the highest percentage of interdepartmental support service is allocated first? (Do not round any intermediary calculations.) O A. $35,446 OB. $40,510 OC. $101,274 O D. $123,256

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 28E: Minor Co. has a job order cost system and applies overhead based on departmental rates. Service...

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