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 two operating 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 department The following data appear in the company records for the current period: IT HR IT tickets 1,555 Publishing 2,488 Binding 2,177 Employees 18 ° Department direct costs $ 154,488 $ 248,490 27 $432,200 45 $395,500 Required: Allocate the service department costs using the reciprocal method. (Matrix algebra is not required because there are only two service departments.) Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations. From: Service department coas IT HR Total Cost Allocation To: IT HR Publishing Binding

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 two operating 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 department The following data appear in the company records for the current period: IT HR IT tickets 1,555 Publishing 2,488 Binding 2,177 Employees 18 ° Department direct costs $ 154,488 $ 248,490 27 $432,200 45 $395,500 Required: Allocate the service department costs using the reciprocal method. (Matrix algebra is not required because there are only two service departments.) Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations. From: Service department coas IT HR Total Cost Allocation To: IT HR Publishing Binding

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 1PB: Support department cost allocation Hooligan Adventure Supply produces and sells various outdoor...

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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?
Refer to the data in Exercise 7.22. The company has decided to simplify its method of allocating support service costs by switching to the direct method. Required: 1. Allocate the costs of the support departments to the producing departments using the direct 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.)
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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 IT HR e 16 1,550 0 Publishing 2,480 Binding 2,170 24 40 $ 154,000 $ 248,400 $ 432,000 $395,000 es Woodstock Binding estimates that the variable costs in the IT Department total $115,000, and in the HR Department variable costs total $145,000. Avoidable fixed costs in the IT Department are $18,500. Required: If Woodstock Binding outsources the IT Department functions, what is the maximum it can pay an outside vendor without increasing total costs? Note: Do not round intermediate calculations. Maximum amount
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
Uramilaben
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
Alpesh
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 HR 0 16 1,525 0 Publishing 2,440 24 $ 152,000 $ 247,950 $ 431,000 Binding 2,135 40 $ 392,500 Woodstock Binding estimates that the variable costs in the IT Department total $112,500, and in the HR Department variable costs to $142,500. Avoidable fixed costs in the IT Department are $18,250. Required: If Woodstock Binding outsources the IT Department functions, what is the maximum it can pay an outside vendor without increasing total costs? Note: Do not round intermediate calculations. × Answer is complete but not entirely correct. Maximum…
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 IT tickets 0 Employees 18 1,555 0 Publishing 2,488 27 Binding 2,177 45 Department direct costs $ 154,400 $ 248,490 $ 432,200 $ 395,500 Required: Allocate the service department costs using the reciprocal method. (Matrix algebra is not required because there are only two service departments.) Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations. From: Service department costs IT HR Total Cost Allocation To: IT HR Publishing Binding