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| Support Departments | Operating Departments | ||||
| Human | Information | Corporate | Consumer | ||
| Resources | Systems | Sales | Sales | ||
| Budgeted costs incurred before any | |||||
| interdepartment cost allocations | $20,000 | $320,000 | $900,000 | $510,000 | |
| Support work supplied by human | |||||
| resources department | |||||
| Budgeted number of employees | — | 30 | 49 | 21 | |
| Support work supplied by information | |||||
| systems department | |||||
| Budgeted processing time (in minutes) | 210 | — | 1,750 | 1,540 | |
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Requirement 1. Allocate the support departments’ costs to the operating departments using the direct method. (Do not round intermediary calculations. Only round the amount you input in the cell to the nearest dollar. Use parentheses or a minus sign when decreasing departments by allocating costs. Enter a “0” for any zero balances. Abbreviations used: HR = Human resources; Info. = Information.)
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Question & Answer: Allocate the support departments' costs to the operating departments using the direct method. (Do not round intermediary calc…..
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| 2. | Rank the support departments based on the percentage of their services provided to other support departments. Use this ranking to allocate the supportdepartments’ costs to the operating departments based on the step-down method. |
| 3. | How could you have ranked the support departments differently?
Could you show the work. |
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