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From: Service department costs IT HR Total $ $ IT 151,600 $ 151,600 HR 247,860 $ 247,860 Publishing $ $ 0 $ 0 $ Binding 0 0

From: Service department costs IT HR Total $ $ IT 151,600 $ 151,600 HR 247,860 $ 247,860 Publishing $ $ 0 $ 0 $ Binding 0 0

FINANCIAL ACCOUNTING
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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From: Service department costs IT HR Total $ $ IT 151,600 $ 151,600 $ Cost Allocation To: HR Publishing 247,860 $ 247,860 $ 0 $ 0 $ Binding 0 O
Transcribed Image Text:From: Service department costs IT HR Total $ $ IT 151,600 $ 151,600 $ Cost Allocation To: HR Publishing 247,860 $ 247,860 $ 0 $ 0 $ Binding 0 O
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 0 24 $ 151,600 HR 1,520 0 $ 247,860 Publishing 2,432 36 $430,800 Binding 2,128 60 $ 392,000 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.
Transcribed Image Text: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 0 24 $ 151,600 HR 1,520 0 $ 247,860 Publishing 2,432 36 $430,800 Binding 2,128 60 $ 392,000 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.
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