Broadway Department Store allocates the personnel and payroll department costs to the sales departments of Shoes, Automotive,
Question:
Broadway Department Store allocates the personnel and payroll department costs to the sales departments of Shoes, Automotive, and Clothing. Human resources (personnel) and payroll also provide services to each other. Personnel costs are allocated by number of employees and payroll costs are allocated by gross payroll. Costs and other information for January were as follows:
Personnel | Payroll | Shoes | Automotive | Clothing | |||||
Current Costs | $ 13,800 | $ 6,400 | $ 24,400 | $ 40,000 | $ 31,500 | ||||
Gross Payroll | $ 3,000 | $ 1,500 | $ 5,600 | $ 8,700 | $ 4,050 | ||||
Number of Employees | 5 | 3 | 8 | 15 | 4 | ||||
Required:
Prepare a schedule that includes the total cost of operating the sales departments for January. Allocate service costs using the step-down method with the sequence of allocation based on highest percentage support concept.
Auditing and Assurance services an integrated approach
ISBN: 978-0132575959
14th Edition
Authors: Alvin a. arens, Randal j. elder, Mark s. Beasley