Exercise 11-35 (Algo) Cost Allocation: Direct Method (LO 11-2) Bens Corporation has three service departments (Repairs, HR, and IT) and two production departments (M1 and M2). The following usage data for each of the service departments for the previous period follow. Repairs HR IT M1 M2 Repairs — 0 % 0 % 40 % 60 % HR 10 % — 20 % 35 % 35 % IT 0 % 10 % — 20 % 70 % The direct costs of the service departments in the previous period were $84,000 for Repairs, $103,600 for HR, and $189,000 for IT. Required: Use the direct method to allocate the service department costs to the production departments. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations.
Exercise 11-35 (Algo) Cost Allocation: Direct Method (LO 11-2) Bens Corporation has three service departments (Repairs, HR, and IT) and two production departments (M1 and M2). The following usage data for each of the service departments for the previous period follow. Repairs HR IT M1 M2 Repairs — 0 % 0 % 40 % 60 % HR 10 % — 20 % 35 % 35 % IT 0 % 10 % — 20 % 70 % The direct costs of the service departments in the previous period were $84,000 for Repairs, $103,600 for HR, and $189,000 for IT. Required: Use the direct method to allocate the service department costs to the production departments. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
100%
Exercise 11-35 (Algo) Cost Allocation: Direct Method (LO 11-2)
Bens Corporation has three service departments (Repairs, HR, and IT) and two production departments (M1 and M2). The following usage data for each of the service departments for the previous period follow.
Repairs | HR | IT | M1 | M2 | |||||||||||
Repairs | — | 0 | % | 0 | % | 40 | % | 60 | % | ||||||
HR | 10 | % | — | 20 | % | 35 | % | 35 | % | ||||||
IT | 0 | % | 10 | % | — | 20 | % | 70 | % | ||||||
The direct costs of the service departments in the previous period were $84,000 for Repairs, $103,600 for HR, and $189,000 for IT.
Required:
Use the direct method to allocate the service department costs to the production departments. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education