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 0% 10% The direct costs of the service departments in the previous period were $253,180 for IT, $100,700 for Accounting, and $114,200 for HR IT Accounting HR Accounting HR West East 0% 20% 40% 40% 0% 40% 60% 20% 60% Allocation Service department costs Required: Use the reciprocal method to allocate the service department costs to the production departments. (Matrix algebra is not required.) Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations. IT allocation Accounting allocation HR allocation Total costs allocated 10% $ IT Accounting 0 $ 0 $ HR 0 $ West 0 $ East 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 0% 10% The direct costs of the service departments in the previous period were $253,180 for IT, $100,700 for Accounting, and $114,200 for HR IT Accounting HR Accounting HR West East 0% 20% 40% 40% 0% 40% 60% 20% 60% Allocation Service department costs Required: Use the reciprocal method to allocate the service department costs to the production departments. (Matrix algebra is not required.) Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations. IT allocation Accounting allocation HR allocation Total costs allocated 10% $ IT Accounting 0 $ 0 $ HR 0 $ West 0 $ East 0

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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Direct, sequential, and reciprocal allocationMing Company has two service departments (S1 and S2) and two production departments (P1 and P2). Last year, directly identified overhead costs were $255,000 for S1 and $320,000 for S2.Information on the consumption of their services follows: Supplying User Departments Departments S1 S2 P1 P2 S1 500 1,200 6,000 1,300 S2 800 200 7,000 9,000 (a) Determine the service department costs allocated to the two production departments using the direct method.Note: Round each rate to two decimal places before calculating the allocated amounts. Round answers to the nearest dollar. Rate Total (rounded to 2 decimals) Total P1 Total P2 (any diff due to rounding) S1 allocation amount Answer Answer Answer S1 allocation amount Answer Answer Answer Total service department costs Answer Answer Answer (b) Determine the service department costs allocated to the two production departments using the…
Bens Corporation has three service departments (Repairs, HR, and IT) and two production departments (M1 and M2). The following usage data for each of the service departments for the previous period follow. Repairs HR IT Repairs HR 0% Service department costs Repairs allocation HR allocation IT allocation Total costs allocated 10% 0% - 10% IT 0% 20% The direct costs of the service departments in the previous period were $92,000 for Repairs, $111,600 for HR, and $207,000 for IT. Required: Use the direct method to allocate the service department costs to the production departments. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations.) M1 40% 35% 20% Repairs M2 60% 35% 70% HR IT M1 M2
BluStar Company has two service departments, Administration and Accounting, and two operating departments, Domestic and International. Administration costs are allocated on the basis of employees, and Accounting costs are allocated on the basis of number of transactions. A summary of BluStar operations follows. Employees Transactions Department direct costs Required A Administration 37,000 $363,000 Required: a. Allocate the cost of the service departments to the operating departments using the direct method. b. Allocate the cost of the service departments to the operating departments using the step method. Start with Administration. c. Allocate the cost of the service departments to the operating departments using the reciprocal method. Complete this question by entering your answers in the tabs below. Required B Required C From Accounting Domestic International 26 47 22,000 $141,000 $955,000 Department costs Administration allocation Accounting allocation Total cost Allocate the cost…
Baldwin Enterprises has two service departments, Personnel and Legal, and two operating divisions, Eastern and Western. Personnel costs are allocated on the basis of employees and Legal costs are allocated on the basis of hours. A summary of Baldwin operations follows: Employees Hours Department direct costs Costs Personnel Legal Complete this question by entering your answers in the tabs below. Total Personnel $ Personnel $ 10,800 $ 320,000 Required: a. Allocate the cost of the service departments to the operating divisions using the direct method. b. Allocate the cost of the service departments to the operating divisions using the step method. Start with Legal. c. Allocate the cost of the service departments to the operating divisions using the reciprocal method. 320,000 $ 320,000 $ Required A Required B Required C Allocate the cost of the service departments to the operating divisions using the reciprocal method. Note: Do not round intermediate calculations. Round your final answers…
4 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 -- Service department costs IT allocation Accounting allocation HR allocation Total costs allocated 0% 10% Accounting HR 0% 20% 0% -- 10% $ -- The direct costs of the service departments in the previous period were $91,000 for IT, $116,000 for Accounting, and $155,000 for HR. IT West 40% 40% 60% 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. East 40% 60% 20% Accounting 0 $ 0 $ Check my work HR 0 $ West 0 $ East 0
Reciprocal Method of Support Department Cost Allocation. Please answer in same format as question, thanks.
Flint Industries operates two support departments, Personnel and Accounting, and two producing departments, Fabrication and Assembly. Information on the support percentages and cost for each department is as follows: Personnel Accounting Fabrication Assembly Personnel O $12262. O $12453. O $11368. O $12378. 0% 10% 35% 55% Accounting 6% 0% 55% 39% Operating Costs $16000 10200 108500 100000 Using the reciprocal method of allocating support costs, what is the total cost allocated to the Fabrication Department from the two support departments?
Western Services has three service departments: Information Systems (IS), Personnel, and Administration. There are two operating departments: Residential and Commercial. A summary of costs and other data for each department prior to allocation of service department costs for the latest period follows: Department Information Systems (IS) Personnel Administration IS 170 115 3,900 Number of IS service tickets Number of employees Square footage occupied The costs of the service departments and the allocation basis for each department follow. Direct Cost $ 33,000 40,000 36,700 Personnel 200 120 8,000 Administration Residential Commercial 155 1,410 107 138 3,800 16,100 Allocation Base IS service tickets Employees Square footage occupied. 940 162 69,500 Required: a. Assume that the company allocates service department costs to production departments using the direct method. What amount of Information Systems (IS) Department costs will be allocated to the Commercial Department? b. Assume the…
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es Activity and selected costs for three production departments (Training, Independent, and Commercial) and two service departments (Accounting and Facilities) at DuBay Films for the past month follow: Supplying Department Accounting Facilities Direct cost From: Service department costs Accounting Facilities Total allocations Direct costs Total costs Accounting 0 0.20 $ 180,000 Required: Allocate service department costs to Training, Independent, and Commercial using the reciprocal method. What are the total costs of Training, Independent, and Commercial after this allocation? Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations. Round your final answers to the nearest whole dollar amounts. Accounting $ $ Facilities 0.30 0 $ 179,500 0 $ 0 $ Using Department Training 0.20 0.20 $ 320,000 Facilities Cost Allocation To: Training 0 $ Independent 0.10 0.10 $ 200,000 0 $ 0 $ 0 $ Commercial 0.40- 0.50 $ 286,000 Independent 0 $ 0 $ Commercial…
Renata Company has four departments: Materials, Personnel, Manufacturing, and Packaging. Information follows. Department Materials Personnel Manufacturing Packaging Employees Square Feet Asset Values $ 7,900 4,740 45,820 20,540 $ 79,000 38 19 76 57 64,750 9,250 92,500 18,500 Total 190 185,000 The four departments share the following indirect expenses for supervision, utilities, and insurance according to their allocation bases. Indirect Expense Supervision Utilities Cost Allocation Base $ 84,400 Number of employees 69,000 Square feet occupied 32,000 Asset values $ 185,400 Insurance Total Allocate each of the three indirect expenses to the four departments. Supervision Cost to be Allocated Allocation Base Percent of Allocation Base Allocated Cost expenses Department Numerator Denominator % of Total Materials Personnel Manufacturing Packaging Totals Cost to be Allocated Utilities Allocation Base Percent of Allocation Base Allocated Cost Department Numerator Denominator % of Total…