Gotham University offers only high-tech graduate-level programs. Gotham has two principal operating departments, Engineering and Computer Sciences,
Question:
Gotham University offers only high-tech graduate-level programs. Gotham has two principal operating departments, Engineering and Computer Sciences, and two support departments, Facility and Technology Maintenance and Enrollment Services. The base used to allocate facility and technology maintenance is budgeted total maintenance hours. The base used to allocate enrollment services is number of credi hours for a department. The Facility and Technology Maintencance budget $350,000, while the Enrollment Services budget is $950,000. The following chart summarizes the budgeted amounts and allocation-base amounts used by each department:
Budget | Engineering | Computer Sciences | F&T Maintenance | Enrollment Service | |
F&T Maintenance hours | $350,000 | 2,000 | 5,000 | zero | 1,000 |
Enrollment Service hours | $950,000 | 24,000 | 36,000 | 2,000 | zero |
Use the direct method, step down method and reciprocal method to allocate support costs to each of the two principal operating departments, Engineering and Computer Sciences. Prepare a schedule showing the support costs allocated to each department.
Fundamentals of Cost Accounting
ISBN: 978-1259969478
6th edition
Authors: William N. Lanen, Shannon Anderson, Michael W Maher