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1 2 Budgeted costs incurred before any 3 interdepartment cost allocations Support work supplied by human 4 resources department 5 Budgeted number of employees Support work supplied by information 6 systems department 7 Budgeted processing time (in minutes) B SUPPORT DEPARTMENTS Human Information Resources Systems $ 40,000 $ 0 280 240,000 $ 20 0 D OPERATING DEPARTMENTS Corporate Consumer Sales Sales 970,000 $ 465,000 50 2,000 30 1,720

1 2 Budgeted costs incurred before any 3 interdepartment cost allocations Support work supplied by human 4 resources department 5 Budgeted number of employees Support work supplied by information 6 systems department 7 Budgeted processing time (in minutes) B SUPPORT DEPARTMENTS Human Information Resources Systems $ 40,000 $ 0 280 240,000 $ 20 0 D OPERATING DEPARTMENTS Corporate Consumer Sales Sales 970,000 $ 465,000 50 2,000 30 1,720

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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O-books, an online book retailer, has two operating departments-corporate sales and consumer sales and two support departments-human resources and information systems. Each sales department conducts merchandising and marketing operations independently O-books uses number of employees to allocate human resources costs and processing time to allocate information systems costs. The following data are available for September 2020: (Click the icon to view the data.) Read the requirements. Requirement 1. Allocate the support departments' costs to the operating departments using the direct method. (Do not round intermediary calculations. Only round the amount you input in the input field to the nearest dollar. Use parentheses or a minus sign when decreasing departments by allocating costs. Enter a "0" for any zero balances. Abbreviations used: HR= Human resources; Info. = Information.) Costs incurred Allocation of HR costs Allocation of Info. System costs Total budgeted costs of operating departments Data table 1 2 A Support Departments HR Budgeted costs incurred before any 3 interdepartment cost allocations Support work supplied by human 4 resources department 5 7 Budgeted number of employees Support work supplied by information 6 systems department Budgeted processing time (in minutes) Info. Systems B Operating Departments Corporate Consumer SUPPORT DEPARTMENTS C Human Information Resources Systems 0 $ 40,000 $ 240,000 $ 280 20 0 D OPERATING DEPARTMENTS E Corporate Consumer Sales Sales 50 Total 970,000 $ 465,000 2,000 30 1,720 Requirements 1. Allocate the support departments' costs to the operating departments using the direct method. 2. 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. 3. How could you have ranked the support departments differently? Print - X Done
Transcribed Image Text:O-books, an online book retailer, has two operating departments-corporate sales and consumer sales and two support departments-human resources and information systems. Each sales department conducts merchandising and marketing operations independently O-books uses number of employees to allocate human resources costs and processing time to allocate information systems costs. The following data are available for September 2020: (Click the icon to view the data.) Read the requirements. Requirement 1. Allocate the support departments' costs to the operating departments using the direct method. (Do not round intermediary calculations. Only round the amount you input in the input field to the nearest dollar. Use parentheses or a minus sign when decreasing departments by allocating costs. Enter a "0" for any zero balances. Abbreviations used: HR= Human resources; Info. = Information.) Costs incurred Allocation of HR costs Allocation of Info. System costs Total budgeted costs of operating departments Data table 1 2 A Support Departments HR Budgeted costs incurred before any 3 interdepartment cost allocations Support work supplied by human 4 resources department 5 7 Budgeted number of employees Support work supplied by information 6 systems department Budgeted processing time (in minutes) Info. Systems B Operating Departments Corporate Consumer SUPPORT DEPARTMENTS C Human Information Resources Systems 0 $ 40,000 $ 240,000 $ 280 20 0 D OPERATING DEPARTMENTS E Corporate Consumer Sales Sales 50 Total 970,000 $ 465,000 2,000 30 1,720 Requirements 1. Allocate the support departments' costs to the operating departments using the direct method. 2. 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. 3. How could you have ranked the support departments differently? Print - X Done
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