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.
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.
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 28E: Minor Co. has a job order cost system and applies overhead based on departmental rates. Service...
Related questions
Question
i need the answer quickly
![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
IT
Accounting
0%
HR
West
East
20%
40%
40%
Accounting
HR
0%
10%
0%
40%
60%
10%
60%
20%
The direct costs of the service departments in the previous period were $86,750 for IT, $99,000 for Accounting, and $112,500 for HR.
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.
Answer is not complete.
Allocation
IT
Accounting
Service department costs
$ 86,750
HR
$99,000 $ 112,500
West
East
IT allocation
(86,750)
34,700
34,700
Accounting allocation
(99,000)
39,600
59,400
HR allocation
(112,500)
67,500 x
22,500 x
Total costs allocated
$
0 $
0
$
0
$
141,800
$
116,600](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F72187745-fa86-44e6-9095-f97b70706a58%2F19a54056-80cf-4b96-8050-8924e008bb8a%2Flem9apo_processed.png&w=3840&q=75)
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
IT
Accounting
0%
HR
West
East
20%
40%
40%
Accounting
HR
0%
10%
0%
40%
60%
10%
60%
20%
The direct costs of the service departments in the previous period were $86,750 for IT, $99,000 for Accounting, and $112,500 for HR.
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.
Answer is not complete.
Allocation
IT
Accounting
Service department costs
$ 86,750
HR
$99,000 $ 112,500
West
East
IT allocation
(86,750)
34,700
34,700
Accounting allocation
(99,000)
39,600
59,400
HR allocation
(112,500)
67,500 x
22,500 x
Total costs allocated
$
0 $
0
$
0
$
141,800
$
116,600
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
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
![Cornerstones of Cost Management (Cornerstones Ser…](https://www.bartleby.com/isbn_cover_images/9781305970663/9781305970663_smallCoverImage.gif)
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
![Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781337912020/9781337912020_smallCoverImage.jpg)
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
![Principles of Cost Accounting](https://www.bartleby.com/isbn_cover_images/9781305087408/9781305087408_smallCoverImage.gif)
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
![Cornerstones of Cost Management (Cornerstones Ser…](https://www.bartleby.com/isbn_cover_images/9781305970663/9781305970663_smallCoverImage.gif)
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
![Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781337912020/9781337912020_smallCoverImage.jpg)
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
![Principles of Cost Accounting](https://www.bartleby.com/isbn_cover_images/9781305087408/9781305087408_smallCoverImage.gif)
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
![Financial And Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781337902663/9781337902663_smallCoverImage.jpg)
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College