Baldwin Enterprises has two service departments, Personnel and Legal, and two operating divisions, Eastern and Western. Personne Costs are allocated on the basis of employees and Legal costs are allocated on the basis of hours. A summary of Baldwin operations follows: s Employees Hours Department direct costs Required: Personnel 10,800 $340,000 Legal Eastern Western 40 120 5,400 40 $ 200,000 $ 1,240,000 1,800 $830,000 a. Allocate the cost of the service departments to the operating divisions using the direct method. b. Allocate the cost of the service departments to the operating divisions using the step method. Start with Legal. c. Allocate the cost of the service departments to the operating divisions using the reciprocal method.

Baldwin Enterprises has two service departments, Personnel and Legal, and two operating divisions, Eastern and Western. Personne Costs are allocated on the basis of employees and Legal costs are allocated on the basis of hours. A summary of Baldwin operations follows: s Employees Hours Department direct costs Required: Personnel 10,800 $340,000 Legal Eastern Western 40 120 5,400 40 $ 200,000 $ 1,240,000 1,800 $830,000 a. Allocate the cost of the service departments to the operating divisions using the direct method. b. Allocate the cost of the service departments to the operating divisions using the step method. Start with Legal. c. Allocate the cost of the service departments to the operating divisions using the reciprocal method.

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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