E-books, an online book retailer, has two operating departments- corporate sales and consumer sales-and two support departments-human resources and information systems. Each sales department conducts merchandising and marketing operations independently. E-books uses number of employees to allocate human resources costs and processing time to allocate information systems costs. The following data are available for September 2012: SUPPORT OPERATING DEPARTMENTS DEPARTMENTS Human Information Corporate Consumer Resources Systems Sales Sales Budgeted costs incurred before any interdepartment cost allocations Support work supplied by $72,700 $234,400 $998,270 $489,860 human resources department Budgeted number of employees Budgeted processing time (in minutes) 21 42 28 320 1,920 1,600 Rank the support departments based on the percentage of their services provided to other support departments. Use this ranking to allocate the support departments' costs to the operating departments based on the step-down method.
E-books, an online book retailer, has two operating departments- corporate sales and consumer sales-and two support departments-human resources and information systems. Each sales department conducts merchandising and marketing operations independently. E-books uses number of employees to allocate human resources costs and processing time to allocate information systems costs. The following data are available for September 2012: SUPPORT OPERATING DEPARTMENTS DEPARTMENTS Human Information Corporate Consumer Resources Systems Sales Sales Budgeted costs incurred before any interdepartment cost allocations Support work supplied by $72,700 $234,400 $998,270 $489,860 human resources department Budgeted number of employees Budgeted processing time (in minutes) 21 42 28 320 1,920 1,600 Rank the support departments based on the percentage of their services provided to other support departments. Use this ranking to allocate the support departments' costs to the operating departments based on the step-down method.
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Transcribed Image Text:E-books, an online book retailer, has two operating departments- corporate sales and
consumer sales-and two support departments-human resources and information
systems. Each sales department conducts merchandising and marketing operations
independently. E-books uses number of employees to allocate human resources costs and
processing time to allocate information systems costs. The following data are available for
September 2012:
SUPPORT
OPERATING
DEPARTMENTS
DEPARTMENTS
Human
Information
Corporate Consumer
Resources
Systems
Sales
Sales
Budgeted costs incurred
before any interdepartment
cost allocations
Support work supplied by
$72,700
$234,400
$998,270 $489,860
human resources
department
Budgeted number of
employees
Budgeted processing time (in
minutes)
21
42
28
320
1,920
1,600
Rank the support departments based on the percentage of their services provided
to other support departments. Use this ranking to allocate the support
departments' costs to the operating departments based on the step-down
method.
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