Management at C. Pier Press has decided to allocate costs of the paper’s two support departments (administration and human resources) to the two revenue-generating departments (advertising and circulation). Administration costs are to be allocated on the basis of dollars of assets employed; human resources costs are to be allocated on the basis of number of employees. The following costs and allocation bases are available: Department Direct Costs Number of Employees Assets Employed Administration $390,750 5 $193,550 Human resources 246,350 4 145,850 Advertising 478,900 6 381,200 Circulation 676,300 13 935,150 Totals $1,792,300 28 $1,655,750 a. Using the direct method, allocate the support department costs to the revenue-generating departments.Total service costs allocated to Advertising: Answer 1 Total service costs allocated to Circulation: Answer 2 b. Using your answer to (a), what are the total costs of the revenue-generating departments after the allocations?Advertising total costs $Answer 3 Circulation total costs $Answer 4 c. Assuming that the benefits-provided ranking is the order shown in the table, use the step method to allocate the support department costs to the revenue-generating departments.Enter the total amount of service department costs (Administration and Human Resources) allocated to revenue-generating departments (Adverting and Circulation).Total service costs allocated to Advertising: Total service costs allocated to Circulation: d. Using your answer to (c), what are the total costs of the revenue-generating departments after the allocations?Advertising total costs Circulation total costs e. Using the algebraic method, allocate the support department costs to the revenue-generating departments.Enter the total amount of service department costs (Administration and Human Resources) allocated to revenue-generating departments (Adverting and Circulation).Total service costs allocated to Advertising: Total service costs allocated to Circulation: f. Using your answer to (e), what are the total costs of the revenue-generating departments after the allocations?Advertising total costs Circulation total costs
Management at C. Pier Press has decided to allocate costs of the paper’s two support departments (administration and human resources) to the two revenue-generating departments (advertising and circulation). Administration costs are to be allocated on the basis of dollars of assets employed; human resources costs are to be allocated on the basis of number of employees. The following costs and allocation bases are available:
| Department | Direct Costs | Number of Employees | Assets Employed | |
|---|---|---|---|---|
| Administration | $390,750 | 5 | $193,550 | |
| Human resources | 246,350 | 4 | 145,850 | |
| Advertising | 478,900 | 6 | 381,200 | |
| Circulation | 676,300 | 13 | 935,150 | |
| Totals | $1,792,300 | 28 | $1,655,750 |
a. Using the direct method, allocate the support department costs to the revenue-generating departments.
Total service costs allocated to Advertising: Answer 1
Total service costs allocated to Circulation: Answer 2
b. Using your answer to (a), what are the total costs of the revenue-generating departments after the allocations?
Advertising total costs $Answer 3
Circulation total costs $Answer 4
c. Assuming that the benefits-provided ranking is the order shown in the table, use the step method to allocate the support department costs to the revenue-generating departments.
Enter the total amount of service department costs (Administration and Human Resources) allocated to revenue-generating departments (Adverting and Circulation).
Total service costs allocated to Advertising:
Total service costs allocated to Circulation:
d. Using your answer to (c), what are the total costs of the revenue-generating departments after the allocations?
Advertising total costs
Circulation total costs
e. Using the algebraic method, allocate the support department costs to the revenue-generating departments.
Enter the total amount of service department costs (Administration and Human Resources) allocated to revenue-generating departments (Adverting and Circulation).
Total service costs allocated to Advertising:
Total service costs allocated to Circulation:
f. Using your answer to (e), what are the total costs of the revenue-generating departments after the allocations?
Advertising total costs
Circulation total costs
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