Bloom Corporation provides management consulting services to retail and manufacturing clients. Bloom has two support departments...
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Bloom Corporation provides management consulting services to retail and manufacturing clients. Bloom has two support departments - Human Resources (HR) and Accounting (AC). Bloom also has two operating departments - Retail Consulting (RC) and Manufacturing Consulting (MC). For the first quarter of 2022, Bloom Corporation's cost records indicate the following: Budgeted direct overhead costs prior to any inter-department allocations Support work supplied by HR (based on employee numbers) Support work supplied by AC (based on revenue generated) Support Depts AC HR $1,800,000 $700,000 $8,450,000 20% Operating Depts. Retail 10% 30% 70% Manufacturing $4,375,000 50% 20% Required: 1. Allocate the support department costs to the operating departments using the direct method. (6 points) 2. Allocated the support department costs to the operating departments using the step down method - allocating Accounting first. (7 points) 3. Allocate the support department costs to the operating departments using the step down method - allocating Human Resources first. (7 points) Bloom Corporation provides management consulting services to retail and manufacturing clients. Bloom has two support departments - Human Resources (HR) and Accounting (AC). Bloom also has two operating departments - Retail Consulting (RC) and Manufacturing Consulting (MC). For the first quarter of 2022, Bloom Corporation's cost records indicate the following: Budgeted direct overhead costs prior to any inter-department allocations Support work supplied by HR (based on employee numbers) Support work supplied by AC (based on revenue generated) Support Depts AC HR $1,800,000 $700,000 $8,450,000 20% Operating Depts. Retail 10% 30% 70% Manufacturing $4,375,000 50% 20% Required: 1. Allocate the support department costs to the operating departments using the direct method. (6 points) 2. Allocated the support department costs to the operating departments using the step down method - allocating Accounting first. (7 points) 3. Allocate the support department costs to the operating departments using the step down method - allocating Human Resources first. (7 points)
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Related Book For
Managerial Accounting Decision Making and Motivating Performance
ISBN: 978-0137024872
1st edition
Authors: Srikant M. Datar, Madhav V. Rajan
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