Exercise 11-27 (Static) Cost Allocation: Direct 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 tickets Employees Department direct costs Service department costs IT allocation HR allocation Total costs allocated $ $ IT IT Required: Use the direct method to allocate these service department costs to the operating departments. Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations. Round "Publishing" and "Binding" answers to 2 decimal places. 0 16 $ 150,000 $ 247,500 150,000 $ (150,000) HR 1,500 0 0 $ HR 247,500 $ (247,500) Publishing 2,400 24 $430,000 0 $ Publishing Binding 2,100 40 $ 390,000 430,000 $ Binding 390,000 430,000.00 $ 390,000.00

 

  

 

Exercise 11-27 (Static) Cost Allocation: Direct 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 IT tickets Employees 16 1,500 8 Publishing 2,400 24 Binding 2,100 40 Department direct costs $ 150,000 $247,500 $ 430,000 $ 390,000 Required: Use the direct method to allocate these service department costs to the operating departments. Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations. Round "Publishing" and "Binding" answers to 2 decimal places. IT HR Publishing Binding Service department costs $ IT allocation 150,000 (150,000) S 247,500 $ 430,000 $ 390,000 HR allocation (247,500) Total costs allocated $ 0 $ 0 S 430,000.00 $ 390,000.00