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As the managing partner of Metlock Accounting Services (HAS). Adam is trying to compare the profitability results of the firm's three different business lines: Audit, Tax, and Advisory Services. These three operating divisions are supported by three support departments: Billing, Human Resources, and IT. The cost drivers (or allocation bases) for each of the support departments, along with each department's usage of those services and its own original costs, are as follows. Support Departments Operating Divisions Billing HR IT Audit Тах Advisory Totals Original cost $67,000 $110,000 $89,000 $506,000 $815,000 $311,000 $1,898,000 Billing hours used 2,000 1,400 600 4,000 Number of employees 2 2 1 12 15 3 35 IT hours used 100 200 200 900 600 300 2,300 Rank the three support departments based on the percentage of their service provided to other support departments, and then allocate their costs using the step method. (Round intermediate calculations to 4 decimal places, eg. 15.2516 and final answers to 2 decimal places, eg. 15.25.) Total Audit Tax Advisory Total

As the managing partner of Metlock Accounting Services (HAS). Adam is trying to compare the profitability results of the firm's three different business lines: Audit, Tax, and Advisory Services. These three operating divisions are supported by three support departments: Billing, Human Resources, and IT. The cost drivers (or allocation bases) for each of the support departments, along with each department's usage of those services and its own original costs, are as follows. Support Departments Operating Divisions Billing HR IT Audit Тах Advisory Totals Original cost $67,000 $110,000 $89,000 $506,000 $815,000 $311,000 $1,898,000 Billing hours used 2,000 1,400 600 4,000 Number of employees 2 2 1 12 15 3 35 IT hours used 100 200 200 900 600 300 2,300 Rank the three support departments based on the percentage of their service provided to other support departments, and then allocate their costs using the step method. (Round intermediate calculations to 4 decimal places, eg. 15.2516 and final answers to 2 decimal places, eg. 15.25.) Total Audit Tax Advisory Total

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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As the managing partner of Metlock Accounting Services (HAS). Adam is trying to compare the profitability results of the firm's three different business lines: Audit, Tax, and Advisory Services. These three operating divisions are supported by three support departments: Billing, Human Resources, and IT. The cost drivers (or allocation bases) for each of the support departments, along with each department's usage of those services and its own original costs, are as follows. Support Departments Operating Divisions Billing HR IT Audit Тах Advisory Totals Original cost $67,000 $110,000 $89,000 $506,000 $815,000 $311,000 $1,898,000 Billing hours used 2,000 1,400 600 4,000 Number of employees 2 2 1 12 15 3 35 IT hours used 100 200 200 900 600 300 2,300
Transcribed Image Text:As the managing partner of Metlock Accounting Services (HAS). Adam is trying to compare the profitability results of the firm's three different business lines: Audit, Tax, and Advisory Services. These three operating divisions are supported by three support departments: Billing, Human Resources, and IT. The cost drivers (or allocation bases) for each of the support departments, along with each department's usage of those services and its own original costs, are as follows. Support Departments Operating Divisions Billing HR IT Audit Тах Advisory Totals Original cost $67,000 $110,000 $89,000 $506,000 $815,000 $311,000 $1,898,000 Billing hours used 2,000 1,400 600 4,000 Number of employees 2 2 1 12 15 3 35 IT hours used 100 200 200 900 600 300 2,300
Rank the three support departments based on the percentage of their service provided to other support departments, and then allocate their costs using the step method. (Round intermediate calculations to 4 decimal places, eg. 15.2516 and final answers to 2 decimal places, eg. 15.25.) Total Audit Tax Advisory Total
Transcribed Image Text:Rank the three support departments based on the percentage of their service provided to other support departments, and then allocate their costs using the step method. (Round intermediate calculations to 4 decimal places, eg. 15.2516 and final answers to 2 decimal places, eg. 15.25.) Total Audit Tax Advisory Total
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