Baldwin Enterprises has two service departments, Personnel and Legal, and two operating divisions, Eastern and We costs are allocated on the basis of employees and Legal costs are allocated on the basis of hours. A summary of Bald follows: Employees Hours Department direct costs Personnel 10,800 $ 330,000 Required A Required B Required C Legal 40 $ 190,000 Complete this question by entering your answers in the tabs below. Eastern 120 5,400 $ 1,230,000 Required: 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. Western Allocate the cost of the service departments to the operating divisions using the direct method. 40 1,800 $ 820,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Baldwin Enterprises has two service departments, Personnel and Legal, and two operating divisions, Eastern and Western. Personnel
costs are allocated on the basis of employees and Legal costs are allocated on the basis of hours. A summary of Baldwin operations
follows:
Employees
Hours
Department direct costs
Required A
Complete this question by entering your answers in the tabs below.
Department costs
Personnel allocation
Legal allocation
Total costs
Costs
Department costs
Legal allocation
Personnel allocation
Total costs
Personnel
Required B Required C
Legal
Required:
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.
From
Total
Allocate the cost of the service departments to the operating divisions using the direct method.
Note: Amounts to be deducted should be indicated by a minus sign.
Personnel
S
$
$
Personnel
OS
0 $
Legal
0 $
Personnel
Legal
10,800
$ 330,000
0 $
Legal
Personnel
0 $
0 $
Eastern
To
0 $
Legal
0 $
Eastern
Eastern
$ 190,000
0 $
48
Western
os
0 $
Western
Western
Eastern
0
120
5,400
$ 1,230,000
Western
48
1,800
$ 820,000
Transcribed Image Text:Baldwin Enterprises has two service departments, Personnel and Legal, and two operating divisions, Eastern and Western. Personnel costs are allocated on the basis of employees and Legal costs are allocated on the basis of hours. A summary of Baldwin operations follows: Employees Hours Department direct costs Required A Complete this question by entering your answers in the tabs below. Department costs Personnel allocation Legal allocation Total costs Costs Department costs Legal allocation Personnel allocation Total costs Personnel Required B Required C Legal Required: 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. From Total Allocate the cost of the service departments to the operating divisions using the direct method. Note: Amounts to be deducted should be indicated by a minus sign. Personnel S $ $ Personnel OS 0 $ Legal 0 $ Personnel Legal 10,800 $ 330,000 0 $ Legal Personnel 0 $ 0 $ Eastern To 0 $ Legal 0 $ Eastern Eastern $ 190,000 0 $ 48 Western os 0 $ Western Western Eastern 0 120 5,400 $ 1,230,000 Western 48 1,800 $ 820,000
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