Kumar, Inc., evaluates managers of producing departments on their ability to control costs. In addition to...
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Kumar, Inc., evaluates managers of producing departments on their ability to control costs. In addition to the costs directly traceable to their departments, each production manager is held responsible for a share of the costs of a support center, the Human Resources (HR) Department. The total costs of HR are allocated on the basis of actual direct labor hours used. The total costs of HR and the actual direct labor hours worked by each producing department are as follows: Direct labor hours worked: Year 1 Year 2 Department A 22,000 24,000 Department B 33,000 24,000 Total hours 55,000 48,000 Actual HR cost $140,000 $140,000 Budgeted HR cost 113,750* 112,000* *$0.25 per direct labor hour plus $100,000. Required: Allocate the HR costs to each producing department for Year 1 and Year 2 using the direct method with actual direct labor hours and actual HR costs. Department A Department B Year 1 Year 2 Kumar, Inc., evaluates managers of producing departments on their ability to control costs. In addition to the costs directly traceable to their departments, each production manager is held responsible for a share of the costs of a support center, the Human Resources (HR) Department. The total costs of HR are allocated on the basis of actual direct labor hours used. The total costs of HR and the actual direct labor hours worked by each producing department are as follows: Direct labor hours worked: Year 1 Year 2 Department A 22,000 24,000 Department B 33,000 24,000 Total hours 55,000 48,000 Actual HR cost $140,000 $140,000 Budgeted HR cost 113,750* 112,000* *$0.25 per direct labor hour plus $100,000. Required: Allocate the HR costs to each producing department for Year 1 and Year 2 using the direct method with actual direct labor hours and actual HR costs. Department A Department B Year 1 Year 2
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Related Book For
Cornerstones of Cost Management
ISBN: 978-1285751788
3rd edition
Authors: Don R. Hansen, Maryanne M. Mowen
Posted Date:
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