FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Exercise 11-32 (Algo) Cost Allocation: Reciprocal Method (LO 11-1)
Woodstock Binding has two service departments, IT (Information Technology) and HR (Human Resources), and two operating
epartments, Publishing and Binding. Management has decided to allocate IT costs on the basis of IT Tickets (issued with each IT
equest) in each department and HR costs on the basis of employees in each department.
The following data appear in the company records for the current period:
IT tickets
Employees
Department direct costs
From:
Service department costs
IT
HR
Total
$
IT
0
22
$ 153,200
IT
Required:
Allocate the service department costs using the reciprocal method. (Matrix algebra is not required because there are only two service
departments.)
Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations.
HR
1,540
0
$ 248,220
0$
Publishing
2,464
33
$ 431,600
Cost Allocation To:
HR
Publishing
05
Binding
0 $
2,156
55
$394,000
Binding
0
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Transcribed Image Text:Exercise 11-32 (Algo) Cost Allocation: Reciprocal Method (LO 11-1) Woodstock Binding has two service departments, IT (Information Technology) and HR (Human Resources), and two operating epartments, Publishing and Binding. Management has decided to allocate IT costs on the basis of IT Tickets (issued with each IT equest) in each department and HR costs on the basis of employees in each department. The following data appear in the company records for the current period: IT tickets Employees Department direct costs From: Service department costs IT HR Total $ IT 0 22 $ 153,200 IT Required: Allocate the service department costs using the reciprocal method. (Matrix algebra is not required because there are only two service departments.) Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations. HR 1,540 0 $ 248,220 0$ Publishing 2,464 33 $ 431,600 Cost Allocation To: HR Publishing 05 Binding 0 $ 2,156 55 $394,000 Binding 0
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