Service Cost AllocationHarley Corp. has two service departments, (Admin Support Dept. & It Support Dept.) and two producingdepartments (AgencyLine and BancAssure). Provided below are the relevant data:Service DepartmentsOperating DepartmentsAdminAgency LineBancAssureDirect CostsP150,000P300,000P5,000,000P6,000,000Services by Admin Support40%40%20%Services by IT Support20%70%10%RequirementsPrepare a 3 different complete service cost allocation report with details using the following methods:1. Direct MethodIT Services

Lets understand the basics. In direct method of cost allocation, service departments costs are…

Harley Corp. has two service departments, (Admin Support Dept. & It Support Dept.) and two producing departments (AgencyLine and BancAssure). Provided below are the relevant data: Service Departments Operating Departments Admin IT Services AgencyLine BancAssure Direct Costs P150,000 P300,000 P5,000,000 P6,000,000 Services by Admin Support 40% 40% 20% Services by IT Support 20% 70% 10% Requirements Prepare a 3 different complete service cost allocation report with details using the following methods: 1. Direct Method

Harley Corp. has two service departments, (Admin Support Dept. & It Support Dept.) and two producing departments (AgencyLine and BancAssure). Provided below are the relevant data: Service Departments Operating Departments Admin IT Services AgencyLine BancAssure Direct Costs P150,000 P300,000 P5,000,000 P6,000,000 Services by Admin Support 40% 40% 20% Services by IT Support 20% 70% 10% Requirements Prepare a 3 different complete service cost allocation report with details using the following methods: 1. Direct Method

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 23E: Refer to the data in Exercise 7.22. The company has decided to simplify its method of allocating...

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Question

Service Cost Allocation
Harley Corp. has two service departments, (Admin Support Dept. & It Support Dept.) and two producing
departments (AgencyLine and BancAssure). Provided below are the relevant data:
Service Departments
Operating Departments
Admin
Agency Line
BancAssure
Direct Costs
P150,000
P300,000
P5,000,000
P6,000,000
Services by Admin Support
40%
40%
20%
Services by IT Support
20%
70%
10%
Requirements
Prepare a 3 different complete service cost allocation report with details using the following methods:
1. Direct Method
IT Services

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