The Murphy Company has two service departments and two operating departments as shown below. The two...
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The Murphy Company has two service departments and two operating departments as shown below. The two service departments provide service to each other as well as to operating departments. Department A's cost is allocated on the basis of employee hours and Department B's cost is allocated on the basis of square feet occupied. The cost of service departments to operating departments are allocated using direct method of cost allocation. Departmental Costs Before Allocation Employee Hours Service & Operating Departments Data Service Departments Dept. A $180,000 6,000 Dept. B 5,000 $45,000 3,000 Operating Departments Dept. X Dept. Y 100 $130,500 Space Occupied: Square Feet Question What is Department B's cost allocated to Department X and Y? 9,000 3,000 $344,500 15,000 22,000 Total $700,000 33,000 30,100 The Murphy Company has two service departments and two operating departments as shown below. The two service departments provide service to each other as well as to operating departments. Department A's cost is allocated on the basis of employee hours and Department B's cost is allocated on the basis of square feet occupied. The cost of service departments to operating departments are allocated using direct method of cost allocation. Departmental Costs Before Allocation Employee Hours Service & Operating Departments Data Service Departments Dept. A $180,000 6,000 Dept. B 5,000 $45,000 3,000 Operating Departments Dept. X Dept. Y 100 $130,500 Space Occupied: Square Feet Question What is Department B's cost allocated to Department X and Y? 9,000 3,000 $344,500 15,000 22,000 Total $700,000 33,000 30,100
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To dispense Division Bs expense for Division X and Office Y utilizing the imm... View the full answer
Related Book For
Management Accounting Information for Decision-Making and Strategy Execution
ISBN: 978-0137024971
6th Edition
Authors: Anthony A. Atkinson, Robert S. Kaplan, Ella Mae Matsumura, S. Mark Young
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