Home Insert Page Layout Formulas Data Review View A SUPPORT OPERATING 1. DEPARTMENTS DEPARTMENTS Human Information Corporate Consumer Resources Systems Sales Sales 3 Budgeted costs incurred before any interdepartment cost allocations Support work supplied by human 5 resources department $72,700 $234,400 $998,270 $489,860 4 Budgeted number of employees Support work supplied by information 7 systems department Budgeted processing time (in minutes) 21 42 28 320 1,920 1,600 1. Allocate the support departments' costs to the operating departments using the direct method. 2. Rank the support departments based on the percentage of their services provided to other support departments. Use this ranking to allocate the support departments' costs to the operating departments based on the step-down method. 3. How could you have ranked the support departments differently? Required
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At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Direct and step-down allocation. E-books, an online book retailer, has two operating departments— corporate sales and consumer sales—and two support departments—human resources and information systems. Each sales department conducts merchandising and marketing operations independently. E-books uses number of employees to allocate human
resources costs and processing time to allocate information systems costs. The following data are available for September 2017:
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