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Required: What is the HR cost that is charged to each division if the number of employees is used as the allocation basis? What is the HR cost that is charged to each division if the wage and salary expense total is used as the allocation basis?

Required: What is the HR cost that is charged to each division if the number of employees is used as the allocation basis? What is the HR cost that is charged to each division if the wage and salary expense total is used as the allocation basis?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Mackenzie Mining has two operating divisions, Northern and Southern, that share the common costs of the company's human resources (HR) department. The annual costs of the HR department total $29,000,000 a year. You have the following selected information about the two divisions: Number of Employees Wage and Salary Expense ($000) $ 266,600 163,400 Northern 3,135 Southern 2,565 Required: What is the HR cost that is charged to each division if the number of employees is used as the allocation basis? What is the HR cost that is charged to each division if the wage and salary expense total is used as the allocation basis?
Transcribed Image Text:Mackenzie Mining has two operating divisions, Northern and Southern, that share the common costs of the company's human resources (HR) department. The annual costs of the HR department total $29,000,000 a year. You have the following selected information about the two divisions: Number of Employees Wage and Salary Expense ($000) $ 266,600 163,400 Northern 3,135 Southern 2,565 Required: What is the HR cost that is charged to each division if the number of employees is used as the allocation basis? What is the HR cost that is charged to each division if the wage and salary expense total is used as the allocation basis?
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