Green Hills University offers only graduate-level programs. Green Hills has two principal operating departments, Business and Sciences,
Question:
Green Hills University offers only graduate-level programs. Green Hills has two principal operating departments, Business and Sciences, and two support departments, Maintenance and Admission Services. The base used to allocate Maintenance services is budgeted total maintenance hours. The base used to allocate Admission services is number of credit hours for a department. The Maintenance budget is $700,000, while the Admission Services budget is $j1,100,000. The following chart summarizes budgeted amounts and allocation-base amounts used by each department:
Services Provided: (Annually) | ||||||
Budget | Business | Sciences | Maintenance Services | Admission Services | ||
Maintenance Services (in hours) | $600,000 | 4,000 | 5,000 | Zero | 5,700 | |
Admission Services (in (credit hours) | $950,000 | 28,000 | 32,000 | 2,500 | Zero |
Required:
Prepare a schedule that allocates service department costs using the step-down method with the sequence of allocation based on the highest-percentage support concept. Compute the total amount of support costs allocated to each of the two principal operating departments, Business and Sciences.
Fundamentals of Cost Accounting
ISBN: 978-1259969478
6th edition
Authors: William N. Lanen, Shannon Anderson, Michael W Maher