Problem 11-54 Cost Allocation: Step and Reciprocal Methods (LO 11-3, 4)

PLEASE SHOW STEP BY STEP CALCULATIONS

Great Eastern Credit Union (GECU) has two operating departments (Branches and Electronic) and three service departments (Processing, Administration, and Maintenance). During July, the following costs and service department usage ratios were recorded:

Supplying Department	Using Department
	Processing			Administration			Maintenance			Branches			Electronic
Processing		0			40	%		0			15	%		45	%
Administration		0			0			0			60	%		40	%
Maintenance		10	%		20	%		0			20	%		50	%
Direct cost	$	92,000		$	620,000		$	340,000		$	5,200,000		$	2,100,000

Required:

Allocate the service department costs to the two operating departments using the reciprocal method.

cancel This window shows your responses and what was marked correct and incorrect from your previous attempt. Award: 0.31 out of O.66 points Problem 11-54 Cost Allocation: Step and Reciprocal Methods (LO 11-3, 4) Great Eastern Credit Union (GECU) has two operating departments (Branches and Electronic) and three service departments (Processing Administration, and Maintenance). During July, the following costs and service department usage ratios were recorded Using Department Supplying Department Processing Administration Maintenance Direct cost Processing Administration 40% Maintenance Branches Electronic 15% 60% 20% 45% 40% 50% 10% 20% $92,000 $620,000 $340,000 $5,200,000 $2,100,000 Required Allocate the service department costs to the two operating departments using the reciprocal method Answer is complete but not entirely correct Allocated to: Costs Processing Administration Electronic 68,000$ 68,000 170,000 41,400 248,000 $ 453,800 459,400 Branches Maintenance Processing Administration Total $ 340,000 34,000 13,800 92,000 620,000 36,800 372,000