Bens Corporation has three service departments (Repairs, HR, and IT) and two production depart- ments (M1 and M2). The following usage data for each of the service departments for the previous period follow. Repairs HR IT M1 M2 Repairs.... 0% 0% 40% 60% HR.. 10% 20% 35% 35% IT. 0% 10% 20% 70% - The direct costs of the service Cepartments in the previous period were $20,000 for Repairs, $39,600 for HR. and $45.000 for IT.
Bens Corporation has three service departments (Repairs, HR, and IT) and two production depart- ments (M1 and M2). The following usage data for each of the service departments for the previous period follow. Repairs HR IT M1 M2 Repairs.... 0% 0% 40% 60% HR.. 10% 20% 35% 35% IT. 0% 10% 20% 70% - The direct costs of the service Cepartments in the previous period were $20,000 for Repairs, $39,600 for HR. and $45.000 for IT.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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
Transcribed Image Text:Required
Use the step method to allocate the service department costs to the production departments.
Allocate HR costs first, followed by IT, and then Repairs.

Transcribed Image Text:Bens Corporation has three service departments (Repairs, HR, and IT) and two production depart-
ments (M1 and M2). The following usage data for each of the service departments for the previous
period follow.
Repairs
HR
IT
M1
M2
Repairs..
0%
0%
40%
60%
HR.
10%
20%
35%
35%
IT
0%
10%
20%
70%
The direct costs of the service Cepartments in the previous period were $20,000 for Repairs,
$39,600 for HR, and $45,000 for IT.
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