Discuss reasons why service department costs are allocated

Assignment Help Managerial Accounting
Reference no: EM132536414

University Publishing Limited has two operating departments-Book sales and Video sales-and two service departments-HRO and IT. The company uses the number of employees to allocate HRO costs and the IT department uses processing time to allocate IT costs. The following data are provided:

Budgeted costs incurred before any cost allocations

Book sales 751,200

Video sales 382,100

HRO 55,600

IT 1 84,700

Budgeted number of employees

Book sales 36

Video sales 18

IT 15

Budgeted processing time (in minutes)

Book sales 1,750

Video sales 1,450

Question a. Allocate the service departments' costs to the operating departments using the direct method.

Question b. Rank the support departments based on the percentage of their services provided to other support departments. Use this ranking to allocate the support departments' costs to the operating departments based on the step-down method.

Question c. Briefly discuss reasons why service department costs are allocated.

Reference no: EM132536414

Questions Cloud

Density of tissue on differential absorption : Explain the effect of atomic number and mass density of tissue on differential absorption.
Magnitude of force from the rope : A person is holding a 50 kg block stationary on a frictionless incline by pulling on a rope. Assuming the incline has a slope has a slope of 30? and the rope
Find the original tension in the string before : Find the original tension in the string before it was tightened.
Should Disney grow-stabilize or retrench : Should Disney grow, stabilize, or retrench? If Disney should grow, where? If stable, how do you improve quality to keep doing what Disney has been doing,
Discuss reasons why service department costs are allocated : Allocate the service departments' costs to the operating departments using the direct method. Discuss reasons why service department costs are allocated.
What is the power output of the speakers : What is the power output of the speakers, assuming a uniform, spherical spread of sound?
Find the magnitude and direction of the sum : Find the magnitude and direction of the sum of the two vectors, A+B. The direction should be given in degrees from the +x axis.
Describe the above mass-spring system : Specify the second order DE as an IVP which describe the above mass-spring system.
Demonstrate how to calculate the period costs : Demonstrate how to calculate the period costs. Direct material used $150,000,Selling costs $5,000, Depreciation on factory equipment $70,000

Reviews

Write a Review

Managerial Accounting Questions & Answers

  Manage budgets and financial plans

Explain the budgeting process and its importance to a business, identifying the components of different budgets, forecast estimates for inclusion in the budgets.

  Prepare a retained earnings statement

Prepare a retained earnings statement for the year and Prepare a stockholders' equity section of given case.

  Prepare a master budget for the three-month period

Prepare a master budget for the three-month period.

  Construct the companys direct labor budget

Construct the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced.

  Evaluate the predetermined overhead rate

Evaluate the Predetermined Overhead Rate

  Determine the company''s bid

Determine the company's bid if activity-based costing is used and the bid is based upon full manufacturing cost plus 30 percent.

  Compute the pool rates for the different activities

Complete the schedule to compute the pool rates for the different activities.

  Prepare Company financial statements

Prepare Company financial statements

  Prepare an analysis of terracycles

This individual assignment is based on the TerraCycle Inc.

  Discuss the ethical issues

Discuss the ethical issues

  Political resources in emerging markets

Calculate the GDP in Income Approach  and Expenditure Approach

  Management accounting - ehsan electronics company

A new plant accountant suggested that the company may be able to assign support costs to products more accurately by using an activity based costing system that relies on a separate rate for each manufacturing activity that causes support costs.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd