Computer Horizons Ltd. manufactures computers. The company has two corporate support departments (legal and personnel) in supporting
Question:
Computer Horizons Ltd. manufactures computers. The company has two corporate support departments (legal and personnel) in supporting each other and two manufacturing departments, the Laptop department and the Workstation department.
The overhead costs of support departments are allocated to the manufacturing departments.
Legal hours are used to allocate the cost of legal department, and personnel hours are used to allocate the cost of personnel department. The budgeted overhead costs and cost allocation bases are given below:
Required:
Report the total costs of the manufacturing departments (Laptop and Workstation) after the support departments’ (Legal and Personnel) costs have been allocated using each of the following methods:
Reciprocal Method
Managerial Accounting Decision Making and Motivating Performance
ISBN: 978-0137024872
1st edition
Authors: Srikant M. Datar, Madhav V. Rajan