Homework Help is Here – Start Your Trial Now!
Business
Accounting
BluStar Company has two service departments, Administration and Accounting, and two operating departments, Domestic and International. Administration costs are allocated on the basis of employees, and Accounting costs are allocated on the basis of number of transactions. A summary of BluStar operations follows. Administration 25,000 $360,000 Employees Transactions Department direct costs Accounting Domestic 25 45 20,000 $144,000 $936,000 International 180 80,000 $3,600,000 Required: a. Allocate the cost of the service departments to the operating departments using the direct method. b. Allocate the cost of the service departments to the operating departments using the step method. Start with Administration. c. Allocate the cost of the service departments to the operating departments using the reciprocal method.

BluStar Company has two service departments, Administration and Accounting, and two operating departments, Domestic and International. Administration costs are allocated on the basis of employees, and Accounting costs are allocated on the basis of number of transactions. A summary of BluStar operations follows. Administration 25,000 $360,000 Employees Transactions Department direct costs Accounting Domestic 25 45 20,000 $144,000 $936,000 International 180 80,000 $3,600,000 Required: a. Allocate the cost of the service departments to the operating departments using the direct method. b. Allocate the cost of the service departments to the operating departments using the step method. Start with Administration. c. Allocate the cost of the service departments to the operating departments using the reciprocal method.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

Do not give answer in image formate 

BluStar Company has two service departments, Administration and Accounting, and two operating departments, Domestic and International. Administration costs are allocated on the basis of employees, and Accounting costs are allocated on the basis of number of transactions. A summary of BluStar operations follows. Employees Transactions Department direct costs Required A From Administration Accounting 25 Required: a. Allocate the cost of the service departments to the operating departments using the direct method. b. Allocate the cost of the service departments to the operating departments using the step method. Start with Administration. c. Allocate the cost of the service departments to the operating departments using the reciprocal method. Complete this question by entering your answers in the tabs below. Department costs Administration allocation. Accounting allocation Total cost 25,000 $360,000 Required B Required C Allocate the cost of the service departments to the operating departments using the direct method. (Do not round intermediate calculations. Negative amounts should be indicated by a minus sign.) $ $144,000 $ Administration Accounting Domestic Domestic 45 20,000 $936,000 To 0 $ International 180 80,000 $3,600,000 International 360,000 $144,000 $936,000 $3,600,000 (360,000) (144,000) 0$ 936,000 $3,600,000
Transcribed Image Text:BluStar Company has two service departments, Administration and Accounting, and two operating departments, Domestic and International. Administration costs are allocated on the basis of employees, and Accounting costs are allocated on the basis of number of transactions. A summary of BluStar operations follows. Employees Transactions Department direct costs Required A From Administration Accounting 25 Required: a. Allocate the cost of the service departments to the operating departments using the direct method. b. Allocate the cost of the service departments to the operating departments using the step method. Start with Administration. c. Allocate the cost of the service departments to the operating departments using the reciprocal method. Complete this question by entering your answers in the tabs below. Department costs Administration allocation. Accounting allocation Total cost 25,000 $360,000 Required B Required C Allocate the cost of the service departments to the operating departments using the direct method. (Do not round intermediate calculations. Negative amounts should be indicated by a minus sign.) $ $144,000 $ Administration Accounting Domestic Domestic 45 20,000 $936,000 To 0 $ International 180 80,000 $3,600,000 International 360,000 $144,000 $936,000 $3,600,000 (360,000) (144,000) 0$ 936,000 $3,600,000
Required A Required B Required C Allocate the cost of the service departments to the operating departments using the step method. Start with Administration. (Do not round Intermediate calculations. Negative amounts should be indicated by a minus sign.) From Department costs Administration allocation Accounting allocation Total cost From Department costs Administration allocation Accounting allocation Total cost Administration Accounting Domestic International $ 360,000 $144,000 $ 936,000 $3,600,000 (360,000) $ Required A Required B Required C Allocate the cost of the service departments to the operating departments using the reciprocal method. (Negative amounts should be indicated by a minus sign. Round intermediate calculations and final answers to the nearest whole dollar amounts.) To $ 0 $ 144,000 $ 936,000 $3,600,000 Administration Accounting 360,000 $ $ 360,000 $ To 144,000 $ 144,000 $ Domestic International 3,600,000 936,000 $ 936,000 $ 3,600,000
Transcribed Image Text:Required A Required B Required C Allocate the cost of the service departments to the operating departments using the step method. Start with Administration. (Do not round Intermediate calculations. Negative amounts should be indicated by a minus sign.) From Department costs Administration allocation Accounting allocation Total cost From Department costs Administration allocation Accounting allocation Total cost Administration Accounting Domestic International $ 360,000 $144,000 $ 936,000 $3,600,000 (360,000) $ Required A Required B Required C Allocate the cost of the service departments to the operating departments using the reciprocal method. (Negative amounts should be indicated by a minus sign. Round intermediate calculations and final answers to the nearest whole dollar amounts.) To $ 0 $ 144,000 $ 936,000 $3,600,000 Administration Accounting 360,000 $ $ 360,000 $ To 144,000 $ 144,000 $ Domestic International 3,600,000 936,000 $ 936,000 $ 3,600,000
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Segment Reporting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
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
SEE MORE TEXTBOOKS