What are the total costs for the residential departments

Reference no: EM13486068

Create an Excel spreadsheet to allocate costs using the direct method and the step-down method. Use the results to answer questions about your findings.

Scenario: Texas Building Services has asked you to help it determine the best method for allocating costs from its service departments to its producing departments. Before the allocation, the four departments incurred costs of $4,100,000. $1,260,000 was deducted from facilities management and added it to the other three departments. There was no net effect on the total cost. In step 2 $660,000 was deducted from human resources and added to the remaining two departments. Total cost was unaffected. After allocation, all $4,100,000 remains, but it is all in the processing and assembly departments. Nothing is left in facilities management or human resources.

1.What are the total costs for the residential departments using the direct method? What are the total costs for the commercial department using the direct method?

2.What are the total costs for the residential department using the step-down method?

3.What are the total costs for the commercial department using the step-down method?

4.Which method would you recommend that Dallas Cleaning use to allocate its service departments' costs to its producing departments? Why?

Reference no: EM13486068

Questions Cloud

Micro chip corporation mcc has a special po box for : micro chip corporation mcc has a special po box for customer payment. jane is responsible for going to the post office

Compute the payback period for a project with the following : compute the payback period for a project with the following cash flows if the companys discount rate is 12.initial

What is the expected return on a stock with a beta of 140 : what is the expected return on a stock with a beta of 1.40 if the riskless rate is 5 and the expected market risk

If inflation is expected to average 7 percent over the : a treasury note with a maturity of four years carries a nominal rate of interest of 10 percent. in contrast an

What are the total costs for the residential departments : create an excel spreadsheet to allocate costs using the direct method and the step-down method. use the results to

Jims stock has a risk premium of 96percent while the : jims stock has a risk premium of 9.6percent while the inflation rate is 3.1 percent and the risk-free rate is 3.8

Franco electronics currently sells a camera for 300 an : franco electronics currently sells a camera for 300. an aggressive competitor has announced plans for a similar product

A company purchased 2000 of merchandise on nov 2 with terms : a company purchased 2000 of merchandise on nov. 2 with terms 210 n30. on nov. 8 it returned 500 worth of merchandise.

The arlington property development co has a 10000 note : the arlington property development co. has a 10000 note receivable from a customer due in 3 years. how much is the

User Account

All Pages