Blue Co. has three production departments A, B, and C. Blue also has two service departments, Administration
Question:
Blue Co. has three production departments A, B, and C. Blue also has two service departments, Administration and Personnel. Administration costs are allocated based on value of assets employed, and Personnel costs are allocated based on number of employees. Assume that Administration provides more service to the other departments than does the Personnel Department.
Dept. | Direct Costs | Employees | Asset Value |
Admin. | $900,000 | 25 | $450,000 |
Personnel | 350,000 | 10 | 600,000 |
A | 700,000 | 15 | 300,000 |
B | 200,000 | 5 | 150,000 |
C | 250,000 | 10 | 800,000 |
Using the direct method, what amount of Personnel costs is allocated to B
Using the direct method, what amount of Administration costs is allocated to C
Using the step method, what amount of Administration costs is allocated to Personnel
Using the step method, what amount of Administration costs is allocated to A
Using the step method, what amount of Administration costs is allocated to B
Assume that Administration costs have been allocated using the step method and the balance in Personnel is $860,000. What amount is allocated to A
Fundamentals of Physics
ISBN: 978-0471758013
8th Extended edition
Authors: Jearl Walker, Halliday Resnick