Management at Thomason Media has decided to allocate the costs of the paper's two support departments...
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Management at Thomason Media has decided to allocate the costs of the paper's two support departments (administration and human resources) to the two support departments (advertising and circulation). Administration costs are to be allocated on the basis of rands of assets employed; human resources costs are to be allocated on the basis of number of employees. The following costs and allocation bases are available: Department Direct Costs Number of Employees Administration R781 500 10 Human resources R492 700 7 Rands of Assets Employed R387 100 R291 700 Advertising R957 800 Circulation R1 352 600 Totals R3 584 600 224 12 R762 400 25 R1 870 300 54 R3 311 500 Required: 5.1 Using the reciprocal method, allocate the support department costs to the revenue-generating departments. (Round off allocation bases to 4 decimals and the cost to the nearest rand.) Management at Thomason Media has decided to allocate the costs of the paper's two support departments (administration and human resources) to the two support departments (advertising and circulation). Administration costs are to be allocated on the basis of rands of assets employed; human resources costs are to be allocated on the basis of number of employees. The following costs and allocation bases are available: Department Direct Costs Number of Employees Administration R781 500 10 Human resources R492 700 7 Rands of Assets Employed R387 100 R291 700 Advertising R957 800 Circulation R1 352 600 Totals R3 584 600 224 12 R762 400 25 R1 870 300 54 R3 311 500 Required: 5.1 Using the reciprocal method, allocate the support department costs to the revenue-generating departments. (Round off allocation bases to 4 decimals and the cost to the nearest rand.)
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Related Book For
Cost Accounting Foundations and Evolutions
ISBN: 978-1111626822
8th Edition
Authors: Michael R. Kinney, Cecily A. Raiborn
Posted Date:
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