Required:Rank the support departments based on the percentage of their services provided to other support departments. Use this ranking to allocate the support departments’ costs to the operating departments based on the step-down method. Question:3Dunlop Tyres, a Tyre manufacturer, has two operating departments- B2B and B2C-andtwo support departments-human resources and information systems. Each Operatingdepartment conducts merchandising and marketing operations independently. Dunlopuses number of employees to allocate human resources costs and processing time toallocate information systems costs. The following data are available for July 2021:SUPPORTOPERATINGDEPARTMENTSDEPARTΜΕNTSHumanInformationCorporate ConsumerResourcesSystemsSalesSalesBudgeted costs incurredbefore any interdepartmentcost allocations$500,000 $1,000,000$700,000$500,000Support work supplied byhuman resourcesdepartmentBudgeted number ofemployeesBudgeted processing time (inminutes)60150904502,2501,800

Particulars Support Department Support Department Operating Department Operating Department…

SUPPORT OPERATING DEPARTΜΕNTS DEPARTΜΕNTS Human Information Corporate Consumer Resources Systems Sales Sales Budgeted costs incurred before any interdepartment cost allocations Support work supplied by $500,000 $1,000,000 $700,000 $500,000 human resources department Budgeted number of employees Budgeted processing time (in minutes) 60 150 90 450 2,250 1,800

SUPPORT OPERATING DEPARTΜΕNTS DEPARTΜΕNTS Human Information Corporate Consumer Resources Systems Sales Sales Budgeted costs incurred before any interdepartment cost allocations Support work supplied by $500,000 $1,000,000 $700,000 $500,000 human resources department Budgeted number of employees Budgeted processing time (in minutes) 60 150 90 450 2,250 1,800

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter4: Accounting For Factory Overhead

Section: Chapter Questions

Problem 9E: A manufacturing company has two service and two production departments. Human Resources and Machine...

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