Need help. Smith and Hawk Landscaping Company uses a centralizedpayroll department to support its 3 divisions. It incurs$45,000 year to run this department and allocates the costof this department based upon the number of employees ineach division. The detail is as follows:DivisionNumber of EmployeesResidential Landscaping 50Commercial Landscaping 120Irrigation Services30200TotalHow much of the $45,000 should be allocated to eachdivision?

Step 1:- Define Cost AllocationCost allocation is a means of delivering assistance to the cost…

Answered: Smith and Hawk Landscaping Company uses…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter10: Evaluating Decentralized Operations

Section: Chapter Questions

Problem 2BE: Support department allocations The centralized computer technology department of Hardy Company has...

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Required information [The following information applies to the questions displayed below.] The following information is departmental cost allocation with two service departments and two production departments. Department Service 1 (S1) Service 2 (S2) Production 1 (P1) Production 2 (P2) Cost $ 47,000 37,000 270,000 320,000 Percentage Service Provided to S1 0% 20 S2 P1 20% 40% 20 0 P2 40% 60 What is the amount of service department cost allocated to P1 and P2 using the direct method if the cost in P1 is changed from $270,000 to $290,000?
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