Memorial Services, Incorporated (MSI) has three service departments (IT, Accounting, and HR) and two production departments (West and East). The usage data for each of the service departments for the previous period follow: IT Accounting HR IT Accounting 0% 0% 10% HR 20% 0% West 10% East 40% 40% 40% 60% 60% 20% The direct costs of the service departments in the previous period were $91,250 for IT, $117,000 for Accounting, and $157,500 for HR. Required: Use the direct method to allocate the service department costs to the production departments. Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations. IT Accounting HR West East Service department costs $ 87,250 IT allocation Accounting allocation HR allocation Total costs allocated $ 87,250 $ 0 $ 0 $ 0 $ 0
Memorial Services, Incorporated (MSI) has three service departments (IT, Accounting, and HR) and two production departments (West and East). The usage data for each of the service departments for the previous period follow: IT Accounting HR IT Accounting 0% 0% 10% HR 20% 0% West 10% East 40% 40% 40% 60% 60% 20% The direct costs of the service departments in the previous period were $91,250 for IT, $117,000 for Accounting, and $157,500 for HR. Required: Use the direct method to allocate the service department costs to the production departments. Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations. IT Accounting HR West East Service department costs $ 87,250 IT allocation Accounting allocation HR allocation Total costs allocated $ 87,250 $ 0 $ 0 $ 0 $ 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Memorial Services, Incorporated (MSI) has three service departments (IT, Accounting, and HR) and two production departments (West
and East). The usage data for each of the service departments for the previous period follow:
IT
Accounting
HR
IT Accounting
0%
0%
10%
HR
20%
0%
West
10%
East
40% 40%
40% 60%
60% 20%
The direct costs of the service departments in the previous period were $91,250 for IT, $117,000 for Accounting, and $157,500 for HR.
Required:
Use the direct method to allocate the service department costs to the production departments.
Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations.
IT
Accounting
HR
West
East
Service department costs
$
87,250
IT allocation
Accounting allocation
HR allocation
Total costs allocated
$
87,250 $
0 $
0 $
0 $
0
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