Please see attached picture for full problem, table, and format for the answers.1. Use the direct method to allocate the service department costs to the production departments. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations.) Bens Corporation has three service departments (Repalrs, HR, and IT) and two production departments (M1 and M2). The followingusage data for each of the service departments for the prevlous period follow.Repairs HRITM1M2RepairsHR10%35%35%IT20%78%The direct costs of the service departments in the prevlous perlod were $8,000 for Repalrs, $107,600 for HR, and $198,000 for IT.Required:Use the direct method to allocate the service department costs to the production departments. (Negative amounts should beIndicated by a minus sign. Do not round intermediate calculations.)RepairsHRITM1M2Service department costsRepairs allocationHR allocationIT allocationTotal costs allocated이 $이 $이 $이 $

Service department will provide services to the production departments. Since it is only the…

Bens Corporation has three service departments (Repairs, HR, and IT) and two production departments (M1 and M2). The following usage data for each of the service departments for the prevlous period follow. Repairs HR e IT M1 M2 Gerx Repairs HR e 4e% 10% 20% 35% 35% IT 20% 78% The direct costs of the service departments in the previous perlod were $88,000 for Repalrs. $107,600 for HR, and $198,000 for IT. Required: Use the direct method to allocate the service department costs to the production departments. (Negative amounts should be Indicated by a minus sign. Do not round intermedlate calculations.) Repairs HR IT M1 M2 Service department costs Repairs allocation HR allocation IT allocation Total costs allocated

Bens Corporation has three service departments (Repairs, HR, and IT) and two production departments (M1 and M2). The following usage data for each of the service departments for the prevlous period follow. Repairs HR e IT M1 M2 Gerx Repairs HR e 4e% 10% 20% 35% 35% IT 20% 78% The direct costs of the service departments in the previous perlod were $88,000 for Repalrs. $107,600 for HR, and $198,000 for IT. Required: Use the direct method to allocate the service department costs to the production departments. (Negative amounts should be Indicated by a minus sign. Do not round intermedlate calculations.) Repairs HR IT M1 M2 Service department costs Repairs allocation HR allocation IT allocation Total costs allocated

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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Concept explainers

Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyze overhead expense as it helps the company in determining how much a company must charge for its products and services so that they can generate profit. Overhead expenses depend upon the nature of the business operations.

Question

Please see attached picture for full problem, table, and format for the answers.

1. Use the direct method to allocate the service department costs to the production departments. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations.)

Bens Corporation has three service departments (Repalrs, HR, and IT) and two production departments (M1 and M2). The following
usage data for each of the service departments for the prevlous period follow.
Repairs HR
IT
M1
M2
Repairs
HR
10%
35%
35%
IT
20%
78%
The direct costs of the service departments in the prevlous perlod were $8,000 for Repalrs, $107,600 for HR, and $198,000 for IT.
Required:
Use the direct method to allocate the service department costs to the production departments. (Negative amounts should be
Indicated by a minus sign. Do not round intermediate calculations.)
Repairs
HR
IT
M1
M2
Service department costs
Repairs allocation
HR allocation
IT allocation
Total costs allocated
이 $
이 $
이 $
이 $

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D
Which one of the following is not a step in allocating the support department cost to the production department? Select one: a. Trace all the overhead cost b. Divide the departments in to support and producing departments c. Undertake a breakeven analysis d. Divide the company in departments
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Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Part 1: Allocate the costs of the 3 service departments using the direct method. Part 2: Allocate the costs of the 3 service departments using the step method, with the order determined by the greater percentage usage. Part 3: Allocate the costs of the 3 service departments using the reciprical method. Part 4:What is one strength and one drawback of each of the methods?
Can you give us the actual formula for determining the overhead rate and not just the two components without relating them to each other, please? That should then help you give a better explanation of how/why the overhead could be over or underapplied.
Since overhead costs are indirect costs, Group of answer choices they require some process of allocation. they can be easily traced to production. they cannot be allocated. a predetermined overhead rate is not advantageous.