Tuscaloosa National Bank has two service departments, the Human Resources (HR) Department and the Computing Department. The bank has two other departments that directly service customers, the Deposit Department and the Loan Department. The usage of the two service departments’ output for the year is as follows: User of Service Provider of Service HR Computing HR 0 10% Computing 10% 0 Deposit 55% 50% Loan 35% 40% The budgeted costs in the two service departments for the year are as follows: HR $ 529,000 Computing 758,500 Required: Use the reciprocal-services method to allocate the budgeted costs of the HR and Computing departments to the Deposit and Loan departments.
Tuscaloosa National Bank has two service departments, the Human Resources (HR) Department and the Computing Department. The bank has two other departments that directly service customers, the Deposit Department and the Loan Department. The usage of the two service departments’ output for the year is as follows: User of Service Provider of Service HR Computing HR 0 10% Computing 10% 0 Deposit 55% 50% Loan 35% 40% The budgeted costs in the two service departments for the year are as follows: HR $ 529,000 Computing 758,500 Required: Use the reciprocal-services method to allocate the budgeted costs of the HR and Computing departments to the Deposit and Loan departments.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Tuscaloosa National Bank has two service departments, the Human Resources (HR) Department and the Computing Department. The bank has two other departments that directly service customers, the Deposit Department and the Loan Department. The usage of the two service departments’ output for the year is as follows:
| User of Service | Provider of Service | |
|---|---|---|
| HR | Computing | |
| HR | 0 | 10% |
| Computing | 10% | 0 |
| Deposit | 55% | 50% |
| Loan | 35% | 40% |
The budgeted costs in the two service departments for the year are as follows:
| HR | $ 529,000 |
|---|---|
| Computing | 758,500 |
Required:
Use the reciprocal-services method to allocate the budgeted costs of the HR and Computing departments to the Deposit and Loan departments.
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