1 Function: SUM; Formulas: Add; Multiply; Divide; Cell Referencing 2 3 E14.2a - Using Excel to Allocate Support Department Costs Using the Direct Method PROBLEM 5 The Screamin' Eagles Company makes wheels and wings for ground transport vehicles and drones. In 6 addition to the key manufacturing departments, Screamin' Eagles needs two key support services, provided 7 by its Maintenance and IT departments. The Maintenance costs are allocated to other departments based on 8 the square footage of space each department occupies. The IT department allocates its costs to other 9 departments based on the amount of time the IT employees spend assisting the other departments. The 10 cost information of all four departments, along with their usage information for both allocation bases, is as 11 follows: 12 13 14 15 16 17 18 19 20 21 22 23 Initial cost Square feet occupied IT labor hours used Support Departments Maintenance Operating Departments Wheels Wings IT Totals $ 125,000 $80,000 $415,000 $ 650,000 $1,270,000 1,200 2,000 1,000 2,400 2,850 5,600 2,150 11,200 6,000 Student Work Area Required: Provide input into cells shaded in yellow in this template. Input the required mathematical formulas or functions with cell references to the Problem area or work area as indicated. Allocate the support department costs using the direct method to determine the total costs for which each operating department should be accountable. Initial cost Allocations: Maintenance IT Total Support Departments Maintenance $ 125,000 $80,000 $ (125,000) (80,000) $ Operating Departments Wheels Wings Totals 415,000 $ 650,000 $1,270,000 37,500 87,500 45,600 34,400 498,100 $ 771,900 $1,270,000
1 Function: SUM; Formulas: Add; Multiply; Divide; Cell Referencing 2 3 E14.2a - Using Excel to Allocate Support Department Costs Using the Direct Method PROBLEM 5 The Screamin' Eagles Company makes wheels and wings for ground transport vehicles and drones. In 6 addition to the key manufacturing departments, Screamin' Eagles needs two key support services, provided 7 by its Maintenance and IT departments. The Maintenance costs are allocated to other departments based on 8 the square footage of space each department occupies. The IT department allocates its costs to other 9 departments based on the amount of time the IT employees spend assisting the other departments. The 10 cost information of all four departments, along with their usage information for both allocation bases, is as 11 follows: 12 13 14 15 16 17 18 19 20 21 22 23 Initial cost Square feet occupied IT labor hours used Support Departments Maintenance Operating Departments Wheels Wings IT Totals $ 125,000 $80,000 $415,000 $ 650,000 $1,270,000 1,200 2,000 1,000 2,400 2,850 5,600 2,150 11,200 6,000 Student Work Area Required: Provide input into cells shaded in yellow in this template. Input the required mathematical formulas or functions with cell references to the Problem area or work area as indicated. Allocate the support department costs using the direct method to determine the total costs for which each operating department should be accountable. Initial cost Allocations: Maintenance IT Total Support Departments Maintenance $ 125,000 $80,000 $ (125,000) (80,000) $ Operating Departments Wheels Wings Totals 415,000 $ 650,000 $1,270,000 37,500 87,500 45,600 34,400 498,100 $ 771,900 $1,270,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:# E14-2 - Using Excel to Allocate Support Department Costs Using the Direct Method
## Problem Description
The Scream'n Eagles company manufactures wheels and wings for ground transport vehicles and drones. In addition to their manufacturing departments, Scream'n Eagles has two key support services, provided by its Maintenance and IT departments.
### Allocation Details:
- **Maintenance Costs**: These are allocated to other departments based on the square footage of space each department occupies.
- **IT Costs**: These are allocated based on the time IT employees spend assisting the other departments.
**Objective**: Determine the total costs for each operating department using the direct method.
## Cost Information and Allocation Metrics:
| | **Support Departments** | **Operating Departments** |
|---------------------|------------------------|--------------------------|
| | Maintenance | IT | Wheels | Wings | **Totals** |
| **Initial Cost ($)**| 125,000 | 80,000| 415,000| 650,000| **1,270,000** |
| **Square Feet Occupied** | 1,200 | 2,000 | 2,400 | 5,600 | 11,200 |
| **IT Labor Hours Used** | 1,000 | 2,850 | 2,150 | 6,000 | |
## Student Work Area
**Required**: Provide input into cells shaded in yellow in this template. Input the required mathematical formulas or functions with cell references to the Problem area or work area as indicated.
### Cost Allocations Using Direct Method:
| | **Support Departments** | **Operating Departments** |
|---------------------|---------------------------|---------------------------|
| | Maintenance | IT | Wheels | Wings | **Totals** |
| **Initial Cost ($)**| 125,000 | 80,000 | 415,000 | 650,000 | **1,270,000** |
| **Allocations:** | | | | | |
| **Maintenance** | (125,000) | | 37,500 | 87,500 | |
| **IT** | | (80,000) | 45,600 | 34,400 | |
| | **Total ($)**| | 498,100| 771,
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