Exercise $11-32($Algo$)$ Cost Allocation: Reciprocal Method $($LO $11-1)$

Woodstock Binding has two service departments, IT $($Information Technology$)$ and HR $($Human Resources$),$ and two operating departments, Publishing and Binding. Management has decided to allocate IT costs on the basis of IT Tickets $($issued with each IT request$)$ in each department and HR costs on the basis of employees in each department.

The following data appear in the company records for the current period:

IT HR Publishing Binding

IT tickets $01,5652,5042,191$

Employees $2203355$

Department direct costs $ $155,200$ $ $248,670$ $ $432,600$ $ $396,500$

Required:

Allocate the service department costs using the reciprocal method. $($Matrix alFrom: Cost Allocation To:

IT HR Publishing Binding

Service department costs

IT

HR

Totalgebra is not rFrom: Cost Allocation To:

IT HR Publishing Binding

Service department costs

IT

HR

Totalequired because there are only two service departments.$)$