Do not give image format Exercise 11-29 (Algo) Cost Allocation: Step Method (LO 11-1)Woodstock Binding has two service departments, IT (Information Technology) and HR (Human Resources), and two operatingdepartments, Publishing and Binding. Management has decided to allocate IT costs on the basis of IT Tickets (issued with each ITrequest) in each department and HR costs on the basis of employees in each department.The following data appear in the company records for the current period:IT ticketsEmployeesDepartment direct costs.a. The order of allocation starts with IT.b. The order of allocation starts with HR.ITFrom:Service department costsHRITTotal costs016$ 153,000SRequired:Use the step method to allocate the service costs, using the following:HRHRComplete this question by entering your answers in the tabs below.1,4000$ 263,8000 $Required ARequireUse the step method to allocate the service costs, using the following:The order of allocation starts with HR.Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations.Publishing1,40024$430,000Cost Allocation To:ITPublishing0 $PAVEL0 $BindingBinding4,20040$ 390,0000 Exercise 11-29 (Algo) Cost Allocation: Step Method (LO 11-1)Woodstock Binding has two service departments, IT (Information Technology) and HR (Human Resources), and two operatingdepartments, Publishing and Binding Management has decided to allocate IT costs on the basis of IT Tickets (issued with each ITrequest) in each department and HR costs on the basis of employees in each department.The following data appear in the company records for the current period.IT ticketsteployeesDepartment direct costso. The order of allocation starts with ITb. The order of allocation starts with HRITRequired B016$ 153,000Required:Use the step method to allocate the service costs, using the following:From:Service department costsITHRTotal costs11HR1,4000$ 263,000Complete this question by entering your answers in the tabs below.Publishing1,40024Required AUse the step method to allocate the service costs, using the following:The order of allocation starts with ITNote: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations.0 $$430,000Cost Allocation To:HRPublishing0 $Binding4,20040$ 390,000Binding

The service department costs are allocated to operating departments using various methods. The…

Exercise 11-29 (Algo) Cost Allocation: Step Method Woodstock Binding has two service departments, IT (Information Technology) and HR (Human Resources), and two operating departments, Publishing and Binding. Management has decided to allocate IT costs on the basis of IT Tickets (issued with each IT request) in each department and HR costs on the basis of employees in each department. The following data appear in the company records for the current period: IT tickets Employees. Department direct costs IT a. The order of allocation starts with IT. b. The order of allocation starts with HR 16 153,000 HR 1,400 $ 263,800 Publishing 1,400 24 $430,000 Required: Use the step method to allocate the service costs, using the following: Binding 4,200 40 $ 390,000

Exercise 11-29 (Algo) Cost Allocation: Step Method Woodstock Binding has two service departments, IT (Information Technology) and HR (Human Resources), and two operating departments, Publishing and Binding. Management has decided to allocate IT costs on the basis of IT Tickets (issued with each IT request) in each department and HR costs on the basis of employees in each department. The following data appear in the company records for the current period: IT tickets Employees. Department direct costs IT a. The order of allocation starts with IT. b. The order of allocation starts with HR 16 153,000 HR 1,400 $ 263,800 Publishing 1,400 24 $430,000 Required: Use the step method to allocate the service costs, using the following: Binding 4,200 40 $ 390,000

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter5: Support Department And Joint Cost Allocation

Section: Chapter Questions

Problem 1CMA

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Support department cost allocation Hooligan Adventure Supply produces and sells various outdoor equipment. The Molding and Assembly production departments are supported by the Personnel and Maintenance departments. Personnel costs are allocated to the production departments based on the number of employees, and Maintenance costs are allocated based on number of service calls. Information about these departments is detailed in the following table: Instructions 1. Assuming that Hooligan Adventure Supply uses the sequential method to allocate its support department costs, which support department does it most likely allocate first? 2. Based on your response in part (1), determine the total costs allocated from each support department to each production department using the sequential method. 3. If Hooligan Adventure Supply wanted to use a more accurate support department cost allocation method, which method should it choose? What might discourage the company from using this method?
A manufacturing company has two service and two production departments. Building Maintenance and Factory Office are the service departments. The production departments are Assembly and Machining. The following data have been estimated for next years operations: The direct charges identified with each of the departments are as follows: The building maintenance department services all departments of the company, and its costs are allocated using floor space occupied, while factory office costs are allocable to Assembly and Machining on the basis of direct labor hours. 1. Distribute the service department costs, using the direct method. 2. Distribute the service department costs, using the sequential distribution method, with the department servicing the greatest number of other departments distributed first.
Refer to the data in Exercise 7.22. The support departments are ranked in order of highest cost to lowest cost. Required: 1. Allocate the costs of the support departments using the sequential method. (Round allocation ratios to four significant digits. Round allocated costs to the nearest dollar.) 2. Using direct labor hours, compute departmental overhead rates. (Round to the nearest cent.)
Bounce Back Insurance Company carries three major lines of insurance: auto, workers compensation, and homeowners. The company has prepared the following report: Management is concerned that the administrative expenses may make some of the insurance lines unprofitable. However, the administrative expenses have not been allocated to the insurance lines. The controller has suggested that the administrative expenses could be assigned to the insurance lines using activity-based costing. The administrative expenses are comprised of five activities. The activities and their rates are as follows: Activity-base usage data for each line of insurance were retrieved from the corporate records as follows: a. Complete the product profitability report through the administrative activities. Determine the operating income as a percent of premium revenue, rounded to the nearest whole percent. b. Interpret the report.
Refer to the data in Exercise 7.20. The company has decided to use the sequential method of allocation instead of the direct method. The support departments are ranked in order of highest cost to lowest cost. Required: 1. Allocate the overhead costs to the producing departments using the sequential method. (Take allocation ratios out to four significant digits. Round allocated costs to the nearest dollar.) 2. Using machine hours, compute departmental overhead rates. (Round the overhead rates to the nearest cent.)
Woodstock Binding has two service departments, IT (Information Technology) and HR (Human Resources), and two operating departments, Publishing and Binding. Management has decided to allocate IT costs on the basis of IT Tickets (issued with each IT request) in each department and HR costs on the basis of employees in each department. The following data appear in the company records for the current period: IT tickets Employees Department direct costs Service department costs IT allocation HR allocation Total costs allocated $ IT IT 0 25 $ 159,000 Required: Use the direct method to allocate these service department costs to the operating departments. Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations. Round "Publishing" and "Binding" answers to 2 decimal places. HR 1,100 0 $ 247,500 0 $ HR Publishing 1,100 33 $ 430,000 0 $ Publishing Binding 3,300 49 $ 390,000 0.00 $ Binding 0.00
Woodstock Binding has two service departments, IT (Information Technology) and HR (Human Resources), and two operating departments, Publishing and Binding. Management has decided to allocate IT costs on the basis of IT Tickets (issued with each IT request) in each department and HR costs on the basis of employees in each department. The following data appear in the company records for the current period: IT tickets Employees Department direct costs Service department costs IT allocation HR allocation Total costs allocated IT $ IT 0 27 $ 151,000 0 $ HR Required: Use the direct method to allocate these service department costs to the operating departments. 1,400 0 Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations. Round "Publishing" and "Binding" answers to 2 decimal places. HR $247,500 Publishing 1,400 35 $430,000 0 Publishing 0 $ Binding 4,200 51 $ 390,000 0.00 $ Binding 0.00
Woodstock Binding has two service departments, IT (Information Technology) and HR (Human Resources), and two operating departments, Publishing and Binding. Management has decided to allocate IT costs on the basis of IT Tickets (issued with each IT request) in each department and HR costs on the basis of employees in each department. The following data appear in the company records for the current period: IT tickets Employees Department direct costs Service department costs IT allocation HR allocation Total costs allocated IT IT 0 33 $ 157,000 HR HR 1,500 0 $ 247,500 Publishing 1,500 41 $ 430,000 Required: Use the direct method to allocate these service department costs to the operating departments. Note: Amounts to be deducted should be Indicated by a minus sign. Do not round Intermediate calculations. Round "Publishing" and "Binding" answers to 2 decimal places. Binding Publishing 4,500 57 $ 390,000 AL Binding
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Woodstock Binding has two service departments, IT (Information Technology) and HR (Human Resources), and two operating departments, Publishing and Binding. Management has decided to allocate IT costs on the basis of IT Tickets (issued with each IT request) in each department and HR costs on the basis of employees in each department. The following data appear in the company records for the current period: IT tickets Employees Department direct costs a. The order of allocation starts with IT. b. The order of allocation starts with HR. IT Required A HR 1,200 0 0 16 $ 152,000 $ 249,600 Required: Use the step method to allocate the service costs, using the following: Required B Publishing 1,200 24 $430,000 Complete this question by entering your answers in the tabs below. X Answer is not complete. Use the step method to allocate the service costs, using the following: Binding Return to question 3,600 40 $ 390,000
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