Exercise 11-32 (Algo) Cost Allocation: Reciprocal Method (LO 11-1)Woodstock Binding has two service departments, IT (information Technology) and HR (Human Resources), and twooperating departments, Publishing and Binding. Management has decided to allocate IT costs on the basis of IT Tickets(issued with cach IT request) in each department and HR casts on the basis of employees in each departmentThe following data appear in the company records for the current period:ITHRIT tickets1,555Publishing2,488Binding2,177Employees18°Department direct costs$ 154,488$ 248,49027$432,20045$395,500Required:Allocate the service department costs using the reciprocal method. (Matrix algebra is not required because there are onlytwo service departments.)Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations.From:Service department coasITHRTotalCost Allocation To:ITHRPublishingBinding

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Answered: Exercise 11-32 (Algo) Cost Allocation:…

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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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: Line Item Description PersonnelDepartment MaintenanceDepartment MoldingDepartment AssemblyDepartment Number of employees 28 10 41 49 Number of service calls 57 41 168 112 Department cost $15,000 $11,400 $72,000 $69,000 1. Which of the following statements matches the sequential method of cost allocations?a. Support departments are often allocated in order from lowest to the highest cost with preference given to the departments that serve few support…
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 HR Publishing Binding IT tickets 0 1,500 2,400 2,100 Employees 16 0 24 40 Department direct costs $ 150,000 $ 247,500 $ 430,000 $ 390,000 Required: Use the step method to allocate the service costs, using the following:The order of allocation starts with IT.Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations. Costs Allocated To: Costs Allocated To: Costs Allocated To: Costs Allocated To: From: IT HR Pubishing Binding Service department costs IT HR Total Costs $ $ $ $
Great job! Western Services has three service departments: Information Systems (IS), Personnel, and Administration. There are two operating departments: Residential and Commercial. A summary of costs and other data for each department prior to allocation of service department costs for the latest period follows: IS Personnel Administration Residential Commercial Number of IS service tickets 125 155 110 1,410 940 Number of employees 70 75 62 138 162 Square footage occupied 3,900 8,000 3,800 16,100 69,500 The costs of the service departments and the allocation basis for each department follow. Department Direct Cost Allocation Base Information Systems (IS) $ 24,000 IS service tickets Personnel 31,000 Employees Administration 27,700 Square footage occupied REQUIRED D AMOUNT: ??
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Job Order Cost Accounting for a Service Company The Fly Company provides advertising services for clients across the nation. The Fly Company is presently working on four projects, each for a different client. The Fly Company accumulates costs for each account (client) on the basis of both direct costs and allocated indirect costs. The direct costs include the charged time of professional personnel and media purchases (air time and ad space). Overhead is allocated to each project as a percentage of media purchases. The predetermined overhead rate is 40% of media purchases. On August 1, the four advertising projects had the following accumulated costs: August 1 Balances Vault Bank $86,800 Take Off Airlines 26,000 Sleepy Tired Hotels 60,800 Tastee Beverages 37,300 Total $210,900 During August, The Fly Company incurred the following direct labor and media purchase costs related to preparing advertising for each of the four accounts: Direct Labor Media Purchases Vault Bank $57,800 $232,800…
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Job Order Cost Accounting for a Service Company The Fly Company provides advertising services for clients across the nation. The Fly Company is presently working on four projects, each for a different client. The Fly Company accumulates costs for each account (client) on the başis of both direct costs and allocated indirect costs. The direct costs include the charged time of professional personnel and media purchases (air time and ad space). Overhead is allocated to each project as a percentage of media purchases. The predetermined overhead rate is 50% of media purchases. On August 1, the four advertising projects had the following accumulated costs: August 1 Balances Vault Bank $68,700 Take Off Airlines 20,600 Sleepy Tired Hotels 48,100 Tastee Beverages 29,500 Total $166,900 During August, The Fly Company incurred the following direct labor and media purchase costs related to preparing advertising for each of the four accounts: Direct Labor Media Purchases Vault Bank $46,100 $173,800…
Job Order Cost Accounting for a Service Company The Fly Company provides advertising services for clients across the nation. The Fly Company is presently working on four projects, each for a different client. The Fly Company accumulates costs for each account (client) on the basis of both direct costs and allocated indirect costs. The direct costs include the charged time of professional personnel and media purchases (air time and ad space). Overhead is allocated to each project as a percentage of media purchases. The predetermined overhead rate is 60% of media purchases. On August 1, the four advertising projects had the following accumulated costs: August 1 Balances Vault Bank $72,500 Take Off Airlines 21,800 Sleepy Tired Hotels 50,800 Tastee Beverages 31,200 Total $176,300 During August, The Fly Company incurred the following direct labor and media purchase costs related to preparing advertising for each of the four accounts: Direct Labor Media…

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