The company’s controller provided you last week the with the HR Department expenses, showing forecasted costs for 2020 (actuals up to August + estimates for September to December).

2020 HR department cost centre spreadsheet in ‘000s

Labour Costs
Salaries	345,000	Salaries of the permanent HR team
Benefits	155,250	Health benefits, life insurance, etc.
Profit Sharing	0	No profit sharing in 2020
Perks	16,400	Company car, meal expenses
Temporary Labour	45,000	Temporary HR staff
Total Labour	561,650

 

HR Team Costs (Direct Costs)
Travel	19,200	Travel of HR team
Consulting	4,500	Cost of the specialized recruiting agency
Training	14,000	Training the HR team
IT (Direct Costs)	1,200	Laptops, cell phones, HR team
Total HR Team Costs	38,900

 

HR Team Indirect Costs*
Facilities	7,500	Share of building rent and property taxes
Services	4,000	Share of receptionist, cleaning
IT (Indirect Costs)	10,500	Share of servers, IT team
Total Indirect Costs	22,000

 

Grand Total             622,550

 

*Indirect costs represent costs that are used by the whole company. They are allocated (shared) across departments using an allocation rate. Typically, facilities costs will be shared using “area occupied”: if the HR team occupies 10% of the office area, they are to be allocated 10% of the total facilities cost.

Answer rating: 100% (QA)

Required 1 Prepare your departments HR operating budget for 2021 Hu... View the full answer