School of Business and School of Education. Each of the operating departments uses the servicesof the company's two support departments: IT - Department and HR - Department. Additionally,the IT and HR departments use the services of each other. Data concerning the past year are asfollows: Support Departments Operating Department IT HR School of School of Department HR -Dept. Business Education Total Budgeted Overhead Cost before any $437,500 $375,120 $825,250 $956,330 $2,594,200 departmental cost allocation Support work furnished by IT - Dept.Budgeted IT Salaries 0 $20,000 $80,000 $100,000 $200,000 Percentage0 10.00% 40.00% 50.00% 100.00% Support work furnished by HR - Dept. Budgeted IT Servicehours 1250 0 3,000 2,000 6, 250 Percentage 20.00% 0 48.00 % 32.00 % 100.00% Directions: 1.What are the total overhead costs of the operating departments (Business and Education) afterthe support - department costs of the IT Dept. and Human Resource Dept. have been allocatedusing (a) the direct method, (b) the step-down method (allocate IT Department first), (c) thestep-down method (allocate Human Resource Department first), and (d) the reciprocal method?

The objective of the question is to calculate the total overhead costs of the operating departments…

Answered: School of Business and School of…

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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