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 IT 16 $ 152,000 HR 1,525 $ 247,950 Publishing 2,440 24 $ 431,000 Binding 2,135 40 $ 392,500 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 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 IT 16 $ 152,000 HR 1,525 $ 247,950 Publishing 2,440 24 $ 431,000 Binding 2,135 40 $ 392,500 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![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
From:
Service department costs
IT
HR
Total
IT
$
0
16
$ 152,000
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.
HR
1,525
0
$ 247,950
152,000
Answer is not complete.
Cost Allocation To:
IT
HR
152,000 $ 247,950
Publishing
2,440
24
$ 431,000
$ 247,950
Publishing
$
Binding
2,135
40
$ 392,500
0
Binding
0](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4fcd0d27-b7d3-473e-9005-6977db3b469b%2Fcf7fd67b-84bf-46ad-9ea0-2d59f0505076%2Fctwudqs_processed.png&w=3840&q=75)
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
From:
Service department costs
IT
HR
Total
IT
$
0
16
$ 152,000
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.
HR
1,525
0
$ 247,950
152,000
Answer is not complete.
Cost Allocation To:
IT
HR
152,000 $ 247,950
Publishing
2,440
24
$ 431,000
$ 247,950
Publishing
$
Binding
2,135
40
$ 392,500
0
Binding
0
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