Salsa has two service departments, the IT Department and HR Department. Salsa also has two production departments, the Cutting department and the Mixing Department. The usage of the two service departments’ output for the year is as follows: Provider of Service User of Service IT HR IT - 15 % HR 5 % - Cutting 45 % 25 % Mixing 50 % 60 % The budgeted costs in the two service departments for the year as follows: IT: $ 400,000 HR: $ 600,000 Use a.) direct method, b.) step-down method and c.) reciprocal services method to allocate the budgeted costs of the two service departments to production departments.
Salsa has two service departments, the IT Department and HR Department. Salsa also has two production departments, the Cutting department and the Mixing Department. The usage of the two service departments’ output for the year is as follows: Provider of Service User of Service IT HR IT - 15 % HR 5 % - Cutting 45 % 25 % Mixing 50 % 60 % The budgeted costs in the two service departments for the year as follows: IT: $ 400,000 HR: $ 600,000 Use a.) direct method, b.) step-down method and c.) reciprocal services method to allocate the budgeted costs of the two service departments to production departments.
Chapter1: Financial Statements And Business Decisions
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Salsa has two service departments, the IT Department and HR Department. Salsa also has two production departments, the Cutting department and the Mixing Department. The usage of the two service departments’ output for the year is as follows:
| Provider of Service | |||
| User of Service | IT | HR | |
| IT | - | 15 % | |
| HR | 5 % | - | |
| Cutting | 45 % | 25 % | |
| Mixing | 50 % | 60 % |
The budgeted costs in the two service departments for the year as follows:
IT: $ 400,000
HR: $ 600,000
Use a.) direct method, b.) step-down method and c.) reciprocal services method to allocate the budgeted costs of the two service departments to production departments.
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