An online book retailer, has two operating divisionslong dashcorporate sales and consumer saleslong dashand two support divisionslong
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Question:
An online book retailer, has two operating divisionslong dashcorporate sales and consumer saleslong dashand two support divisionslong dashhuman resources and information systems. Each sales division conducts merchandising and marketing operations independently. Upper I dash books uses number of employees to allocate human resources costs and processing time to allocate information systems costs. The following data are available for September.
Part
Requirement Allocate the support divisions' costs to the operating divisions using the direct method. Remember to round to seven decimals when calculating your percentages. Round your final answers to the nearest whole dollar. Use parentheses or a minus sign when decreasing divisions by allocating costs. Complete all answer boxes. For amounts with a $ balance, make sure to enter in the appropriate field.
Support Divisions
Operating Divisions
Human Resources
Information Systems
Corporate Sales
Consumer Sales
Total
Costs incurred
Allocation of human resources costs
Allocation of information systems costs
Total budgeted costs of operating divisions
Data
Support Divisions
Operating Divisions
Human Resources
Information Systems
Corporate Sales
Consumer Sales
Budgeted costs incurred before any interdivision cost allocations
$
$
$
$
Support work supplied by human resources division
Budgeted number of employees
Support work supplied by information systems division
Budgeted processing time in minutes
Required
Allocate the support divisions' costs to the operating divisions using the direct method.
Rank the support divisions based on the percentage of their services provided to other support divisions. Use this ranking to allocate the support divisions' costs to the operating divisions based on the stepdown method.
How could you have ranked the support divisions differently?
Related Book For
Cost Accounting A Managerial Emphasis
ISBN: 978-0133138443
7th Canadian Edition
Authors: Srikant M. Datar, Madhav V. Rajan, Charles T. Horngren, Louis Beaubien, Chris Graham
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