Question: Problem 11-55 (Algo) Comparison of Allocation Methods (LO 11-2, 3, 4) BluStar Company has two service departments, Administration and Accounting, and two operating departments, Domestic

 Problem 11-55 (Algo) Comparison of Allocation Methods (LO 11-2, 3, 4)BluStar Company has two service departments, Administration and Accounting, and two operatingdepartments, Domestic and International. Administration costs are allocated on the basis of

Problem 11-55 (Algo) Comparison of Allocation Methods (LO 11-2, 3, 4) BluStar Company has two service departments, Administration and Accounting, and two operating departments, Domestic and International. Administration costs are allocated on the basis of employees, and Accounting costs are allocated on the basis of number of transactions. A summary of BluStar operations follows. Administration Accounting 24 Employees Transactions Department direct costs 36,000 $363,000 Domestic 47 20,000 $935,000 International 29 80,000 $3,510,000 $141,000 Required: a. Allocate the cost of the service departments to the operating departments using the direct method. b. Allocate the cost of the service departments to the operating departments using the step method. Start with Administration. c. Allocate the cost of the service departments to the operating departments using the reciprocal method. Complete this question by entering your answers in the tabs below. Required A Required B Required C Allocate the cost of the service departments to the operating departments using the direct method. (Do not round intermediate calculations. Negative amounts should be indicated by a minus sign.) From Department costs Administration allocation Accounting allocation Total cost To Administration Accounting $ 363,000 $ 141,000 $ (363,000) 0 0 (141,000) $ 0 $ 0 $ Domestic International 935,000 $ 3,510,000 mirrrrrrrrrrrrr 170,610 105,270 1,105,610 $ 3,615,270 Required A Required B Required C Allocate the cost of the service departments to the operating departments using the step method. Start with Administration. (Do not round intermediate calculations. Negative amounts should be indicated by a minus sign.) To Administration Accounting Domestic International From Department costs Administration allocation Accounting allocation Total cost $ 0 $ 0 $ 0 0 Required A Required B Required C Allocate the cost of the service departments to the operating departments using the reciprocal method. (Do not round intermediate calculations. Negative amounts should be indicated by a minus sign. Round your final answers to the nearest whole dollar amounts.) To Administration Accounting Domestic International From Department costs Administration allocation Accounting allocation Total cost 0 $ 0 $ 0

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!