Exercise $11-33($Algo$)$ Cost Allocation: Direct Method $($LO $11-1)$ Exercise $11-33($Algo$)$ Cost Allocation: Direct Method $($LO $11-1)$

Memorial Services, Incorporated $($MSI$)$ has three service departments $($IT$,$ Accounting, and HR$)$ and two production departments $($West

and East$).$ The usage data for each of the service departments for the previous period follow:

The direct costs of the service departments in the previous period were $$90,750$ for IT$,$ $$115,000$ for Accounting, and $$152,500$ for $HR.$

Required:

Use the direct method to allocate the service department costs to the production departments.

Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations.

Answer is not complete.

Memorial Services, Incorporated $($MSI$)$ has three service departments $($IT$,$ Accounting, and HR$)$ and two production departments $($West and East$).$ The usage data for each of the service departments for the previous period follow:

IT Accounting HR West East

IT $--0\%20\%40\%40\%$

Accounting $0\%--0\%40\%60\%$

HR $10\%10\%--60\%20\%$

The direct costs of the service departments in the previous period were $$90,750$ for IT$,$ $$115,000$ for Accounting, and $$152,500$ for HR$.$

Required:

Use the direct method to allocate the service department costs to the production departments.

Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations.