Exercise 11-35 (Static) Cost Allocation: Reciprocal Method (LO 11-1) Memorial Services, Incorporated (MSI) has three service departments (IT, Accounting, and HR) and two production departments (West and East). The usage data for each of the service departments for the previous period follow: IT IT Accounting 0% HR West East 20% 40% 40% Accounting HR 0% 10% 0%. 40% 60% 10% 60% 20% The direct costs of the service departments in the previous period were $86,750 for IT, $99,000 for Accounting, and $112,500 for HR. Required: Use the reciprocal method to allocate the service department costs to the production departments. (Matrix algebra is not required.) Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations. Allocation IT Accounting HR West East Service department costs IT allocation Accounting allocation HR allocation Total costs allocated $ 0 $ 0 $ 0 $ 0 $ 0
Exercise 11-35 (Static) Cost Allocation: Reciprocal Method (LO 11-1) Memorial Services, Incorporated (MSI) has three service departments (IT, Accounting, and HR) and two production departments (West and East). The usage data for each of the service departments for the previous period follow: IT IT Accounting 0% HR West East 20% 40% 40% Accounting HR 0% 10% 0%. 40% 60% 10% 60% 20% The direct costs of the service departments in the previous period were $86,750 for IT, $99,000 for Accounting, and $112,500 for HR. Required: Use the reciprocal method to allocate the service department costs to the production departments. (Matrix algebra is not required.) Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations. Allocation IT Accounting HR West East Service department costs IT allocation Accounting allocation HR allocation Total costs allocated $ 0 $ 0 $ 0 $ 0 $ 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Exercise 11-35 (Static) Cost Allocation: Reciprocal Method (LO 11-1)
Memorial Services, Incorporated (MSI) has three service departments (IT, Accounting, and HR) and two production departments (West
and East). The usage data for each of the service departments for the previous period follow:
IT
Accounting
HR
IT
Accounting
0%
HR
West East
28%
40%
40%
0%
10%
--
0%
40%
60%
10%
60%
20%
The direct costs of the service departments in the previous period were $86,750 for IT, $99,000 for Accounting, and $112,500 for HR.
Required:
Use the reciprocal method to allocate the service department costs to the production departments. (Matrix algebra is not required.)
Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations.
Allocation
Service department costs
IT allocation
Accounting allocation
IT
Accounting
HR
West
East
HR allocation
Total costs allocated
$
0 $
0
$
0 $
0 $
0
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