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 HR Publishing Binding IT tickets 0 1,500 2,400 2,100 Employees 16 0 24 40 Department direct costs $ 150,000 $ 247,500 $ 430,000 $ 390,000 Required: Use the step method to allocate the service costs, using the following: The order of allocation starts with HR. Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations. Cost Allocation To: Cost Allocation To: Cost Allocation To: Cost Allocation To: From: HR IT Publishing Binding Service department costs HR IT Total costs $ $ $ $
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 HR Publishing Binding IT tickets 0 1,500 2,400 2,100 Employees 16 0 24 40 Department direct costs $ 150,000 $ 247,500 $ 430,000 $ 390,000 Required: Use the step method to allocate the service costs, using the following: The order of allocation starts with HR. Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations. Cost Allocation To: Cost Allocation To: Cost Allocation To: Cost Allocation To: From: HR IT Publishing Binding Service department costs HR IT Total costs $ $ $ $
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 | HR | Publishing | Binding | |
|---|---|---|---|---|
| IT tickets | 0 | 1,500 | 2,400 | 2,100 |
| Employees | 16 | 0 | 24 | 40 |
| Department direct costs | $ 150,000 | $ 247,500 | $ 430,000 | $ 390,000 |
Required:
Use the step method to allocate the service costs, using the following:
The order of allocation starts with HR.
Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations.
| Cost Allocation To: | Cost Allocation To: | Cost Allocation To: | Cost Allocation To: | |
| From: | HR | IT | Publishing | Binding |
|
Service department costs |
||||
| HR | ||||
| IT | ||||
| Total costs | $ | $ | $ | $ |
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