FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Woodstock Binding has two service departments, IT (Information Technology) and HR (Human Resources), and two operating departments, Publishing and Binding. Management has decided to allocate IT costs on the basis of IT Tickets (issued with each IT request) 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 | HR | Publishing | Binding | |
---|---|---|---|---|
IT tickets | 0 | 1,500 | 2,400 | 2,100 |
Employees | 16 | 0 | 24 | 40 |
Department direct costs | $ 150,000 | $ 247,500 | $ 430,000 | $ 390,000 |
Required:
Use the step method to allocate the service costs, using the following:
The order of allocation starts with IT.
Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations.
Costs Allocated To: | Costs Allocated To: | Costs Allocated To: | Costs Allocated To: | |
From: | IT | HR | Pubishing | Binding |
Service department costs |
||||
IT | ||||
HR | ||||
Total Costs | $ | $ | $ | $ |
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