Problem 11-60 (Static) Cost Allocation: Step and Reciprocal Methods (LO 11-1) Dunedin Bank has two operating departments (Retail and Commercial) and three service departments: Operations, Infor Technology (IT), and Transactions. For the last period, the following costs and service department usage ratios were rec Supplying Department Transactions IT Operations Direct cost IT From: Operations Transactions Total Transactions 0 10% 60% $ 240,000 IT Costs Operations 0 0 0 $ 660,000 Using Department Operations Allocated to: Transactions Required: a. Allocate the service department costs to the two operating departments using the reciprocal method. S 0 20% 0 $ 1,500,000 Retail Retail 0 $ $ 3,700,000 Commercial 70% 30% 10% 0 Commercial 30% 40% 30% $ 2,250,000
Problem 11-60 (Static) Cost Allocation: Step and Reciprocal Methods (LO 11-1) Dunedin Bank has two operating departments (Retail and Commercial) and three service departments: Operations, Infor Technology (IT), and Transactions. For the last period, the following costs and service department usage ratios were rec Supplying Department Transactions IT Operations Direct cost IT From: Operations Transactions Total Transactions 0 10% 60% $ 240,000 IT Costs Operations 0 0 0 $ 660,000 Using Department Operations Allocated to: Transactions Required: a. Allocate the service department costs to the two operating departments using the reciprocal method. S 0 20% 0 $ 1,500,000 Retail Retail 0 $ $ 3,700,000 Commercial 70% 30% 10% 0 Commercial 30% 40% 30% $ 2,250,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
answer in text form please (without image)
Transcribed Image Text:Problem 11-60 (Static) Cost Allocation: Step and Reciprocal Methods (LO 11-1)
Dunedin Bank has two operating departments (Retail and Commercial) and three service departments: Operations, Information
Technology (IT), and Transactions. For the last period, the following costs and service department usage ratios were recorded:
Supplying Department
Transactions
IT
Operations
Direct cost
IT
From:
Operations
Transactions
Total
Transactions
0
10%
60%
$ 240,000
IT
Costs Operations
0
0
0
$ 660,000
Using Department
Operations
Allocated to:
Transactions
Required:
a. Allocate the service department costs to the two operating departments using the reciprocal method.
$
0
20%
0
$ 1,500,000
Retail
Retail
0 $
70%
30%
10%
$ 3,700,000
Commercial
Commercial
30%
40%
30%
$ 2,250,000
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education