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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
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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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 request) 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 Show Transcribed Text From: Service department costs IT HR Total IT 0 18 $ 156,400 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. HR 1,580 0 $ 248,940 $ $ C Publishing 2,528 27 $ 433,200 Answer is complete but not entirely correct. IT 156,400 (217,040)✔ 60,640 0 Binding 2,212 45 $ 398,000 Cost Allocation To: HR Publishing $ 248,940 $ 433,200 54,260 86,816 (303,200) 90,960 IS 610,976 $ 0 Binding $ 398,000 X 75,964 151,600 625,564 $
Transcribed Image Text: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 request) 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 Show Transcribed Text From: Service department costs IT HR Total IT 0 18 $ 156,400 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. HR 1,580 0 $ 248,940 $ $ C Publishing 2,528 27 $ 433,200 Answer is complete but not entirely correct. IT 156,400 (217,040)✔ 60,640 0 Binding 2,212 45 $ 398,000 Cost Allocation To: HR Publishing $ 248,940 $ 433,200 54,260 86,816 (303,200) 90,960 IS 610,976 $ 0 Binding $ 398,000 X 75,964 151,600 625,564 $
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