Beckett works for Bramble Inc., which produces stuffed animals and dolls in the likeness of customers' pets or loved ones. This way, they can always be together, even when they're apart. To make sure the full cost of making and selling these products is correctly determined, Beckett must carefully assign the support department costs to the operating departments. At the end of the year, these costs are compared to revenues from each segment for profitability analysis. If product categories did not generate as much profit margin as management had hoped, then selling prices and costs are adjusted to manage the margins for next year. Here is the information he has gathered: Total support department costs: HR, $95,200; Legal, $108,640. Total costs in the Animals segment are $652,000, while total costs in the Dolls segment are $519,000. HR provides support to Legal, in addition to the Animals and Dolls segments: 20%, 35%, and 45%, respectively. Legal also provides support to HR and to the Animals and Dolls segments: 30%, 20%, and 50%, respectively. (a) (b) (c) Determine the total costs in each operating department if the reciprocal method is used to allocate support costs. (Round answers to 2 decimal places, e.g. 15.25.) Operating Segments Animals Dolls Totals $ $ +A Total costs

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
Beckett works for Bramble Inc., which produces stuffed animals and dolls in the likeness of customers' pets or loved ones. This way,
they can always be together, even when they're apart.
To make sure the full cost of making and selling these products is correctly determined, Beckett must carefully assign the support
department costs to the operating departments. At the end of the year, these costs are compared to revenues from each segment for
profitability analysis. If product categories did not generate as much profit margin as management had hoped, then selling prices and
costs are adjusted to manage the margins for next year. Here is the information he has gathered:
Total support department costs: HR, $95,200; Legal, $108,640.
Total costs in the Animals segment are $652,000, while total costs in the Dolls segment are $519,000.
HR provides support to Legal, in addition to the Animals and Dolls segments: 20%, 35%, and 45%, respectively. Legal also
provides support to HR and to the Animals and Dolls segments: 30%, 20%, and 50%, respectively.
(a)
(b)
(c)
Determine the total costs in each operating department if the reciprocal method is used to allocate support costs. (Round answers
to 2 decimal places, e.g. 15.25.)
Operating Segments
Animals
Dolls
Totals
$
$
+A
Total costs
Transcribed Image Text:Beckett works for Bramble Inc., which produces stuffed animals and dolls in the likeness of customers' pets or loved ones. This way, they can always be together, even when they're apart. To make sure the full cost of making and selling these products is correctly determined, Beckett must carefully assign the support department costs to the operating departments. At the end of the year, these costs are compared to revenues from each segment for profitability analysis. If product categories did not generate as much profit margin as management had hoped, then selling prices and costs are adjusted to manage the margins for next year. Here is the information he has gathered: Total support department costs: HR, $95,200; Legal, $108,640. Total costs in the Animals segment are $652,000, while total costs in the Dolls segment are $519,000. HR provides support to Legal, in addition to the Animals and Dolls segments: 20%, 35%, and 45%, respectively. Legal also provides support to HR and to the Animals and Dolls segments: 30%, 20%, and 50%, respectively. (a) (b) (c) Determine the total costs in each operating department if the reciprocal method is used to allocate support costs. (Round answers to 2 decimal places, e.g. 15.25.) Operating Segments Animals Dolls Totals $ $ +A Total costs
AI-Generated Solution
AI-generated content may present inaccurate or offensive content that does not represent bartleby’s views.
steps

Unlock instant AI solutions

Tap the button
to generate a solution

Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education