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Grey's Medical operates three support departments and two operating units, Surgery and ER. The support departments are allocated based on the hours used. The cost of operating the accounting (acct), administration (admin), and human resources (HR) departments is $260,000, $150,000, and $60,000, respectively. Information on the hours used are as follows:   Acct Admin HR Surgery ER Hours in Acct   20 48 360 220 Hours in Admin 16   8 120 80 Hours in HR 8 4   65 130 What are the total costs allocated from the accounting department to the operating units?   Question options:   a)  $265,789.00   b)  $0.00   c)  $276,511.00   d)  $274,765.00

Grey's Medical operates three support departments and two operating units, Surgery and ER. The support departments are allocated based on the hours used. The cost of operating the accounting (acct), administration (admin), and human resources (HR) departments is $260,000, $150,000, and $60,000, respectively. Information on the hours used are as follows:   Acct Admin HR Surgery ER Hours in Acct   20 48 360 220 Hours in Admin 16   8 120 80 Hours in HR 8 4   65 130 What are the total costs allocated from the accounting department to the operating units?   Question options:   a)  $265,789.00   b)  $0.00   c)  $276,511.00   d)  $274,765.00

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter7: Allocating Costs Of Support Departments And Joint Products
Section: Chapter Questions
Problem 30E: A company uses charging rates to allocate service department costs to the using departments. The...
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Grey's Medical operates three support departments and two operating units, Surgery and ER. The support departments are allocated based on the hours used. The cost of operating the accounting (acct), administration (admin), and human resources (HR) departments is $260,000, $150,000, and $60,000, respectively. Information on the hours used are as follows:

  Acct Admin HR Surgery ER
Hours in Acct   20 48 360 220
Hours in Admin 16   8 120 80
Hours in HR 8 4   65 130

What are the total costs allocated from the accounting department to the operating units?

 

Question options:

 

a) 

 $265,789.00
 

b) 

 $0.00
 

c) 

 $276,511.00
 

d) 

 $274,765.00
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