Alpesh Woodstock Binding has two service departments, IT (Information Technology) and HR (Human Resources), and two operatingdepartments, Publishing and Binding. Management has decided to allocate IT costs on the basis of IT Tickets (issued with each ITrequest) in each department and HR costs on the basis of employees in each department.The following data appear in the company records for the current period:IT ticketsEmployeesDepartment direct costsShow Transcribed TextFrom:Service department costsITHRTotalIT018$ 156,400Required:Allocate the service department costs using the reciprocal method. (Matrix algebra is not required because there are only two servicedepartments.)Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations.HR1,5800$ 248,940$$CPublishing2,52827$ 433,200Answer is complete but not entirely correct.IT156,400(217,040)✔60,6400Binding2,21245$ 398,000Cost Allocation To:HRPublishing$ 248,940 $ 433,20054,26086,816(303,200)90,960IS 610,976$0Binding$ 398,000 X75,964151,600625,564$

According to the question, we need to prepare the allocation statement using the reciprocal…

Woodstock Binding has two service departments, IT (Information Technology) and HR (Human Resources), and two operating departments, Publishing and Binding. Management has decided to allocate IT costs on the basis of IT Tickets (issued with each IT equest) in each department and HR costs on the basis of employees in each department. The following data appear in the company records for the current period: IT tickets Employees Department direct costs IT 0 18 $ 156,400 HR 1,580 0 $ 248,940 Publishing 2,528 27 $ 433,200 Binding 2,212 45 $ 398,000 Required: Allocate the service department costs using the reciprocal method. (Matrix algebra is not required because there are only two service departments.) Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations.

Woodstock Binding has two service departments, IT (Information Technology) and HR (Human Resources), and two operating departments, Publishing and Binding. Management has decided to allocate IT costs on the basis of IT Tickets (issued with each IT equest) in each department and HR costs on the basis of employees in each department. The following data appear in the company records for the current period: IT tickets Employees Department direct costs IT 0 18 $ 156,400 HR 1,580 0 $ 248,940 Publishing 2,528 27 $ 433,200 Binding 2,212 45 $ 398,000 Required: Allocate the service department costs using the reciprocal method. (Matrix algebra is not required because there are only two service departments.) Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations.

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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