be allocated on the basis of dollars of assets employed; human resources costs are to be allocated on the basis of number of employees. The following costs and allocation bases are available: Department Direct Costs Number of Employees Assets Employed Administration $1,094,100 14 $541,940 Human resources 689,780 11 408,380 Advertising 1,340,920 17
be allocated on the basis of dollars of assets employed; human resources costs are to be allocated on the basis of number of employees. The following costs and allocation bases are available: Department Direct Costs Number of Employees Assets Employed Administration $1,094,100 14 $541,940 Human resources 689,780 11 408,380 Advertising 1,340,920 17
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter5: Support Department And Joint Cost Allocation
Section: Chapter Questions
Problem 1PB: Support department cost allocation Hooligan Adventure Supply produces and sells various outdoor...
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Comprehensive support department allocations
Management at C. Pier Press has decided to allocate costs of the paper’s two support departments (administration and human resources) to the two revenue-generating departments (advertising and circulation). Administration costs are to be allocated on the basis of dollars of assets employed; human resources costs are to be allocated on the basis of number of employees. The following costs and allocation bases are available:
Department | Direct Costs | Number of Employees | Assets Employed | |
---|---|---|---|---|
Administration | $1,094,100 | 14 | $541,940 | |
Human resources | 689,780 | 11 | 408,380 | |
Advertising | 1,340,920 | 17 | 1,067,360 | |
Circulation | 1,893,640 | 36 | 2,618,420 | |
Totals | $5,018,440 | 78 | $4,636,100 |
c. Assuming that the benefits-provided ranking is the order shown in the table, use the step method to allocate the support department costs to the revenue-generating departments.
Note: Round your final answers only to the nearest whole dollar.
Note: Round your final answers only to the nearest whole dollar.
Amount allocated to Advertising: $1,094,100
Amount allocated to Circulation: $
d. Using your answer to (c), what are the total costs of the revenue-generating departments after the allocations?
Advertising total costs $
Circulation total costs $
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