Determine total cost Direct Step and Reciprocal
Comprehensive Insurance Company has two product lines: health insurance and auto insurance. The two product lines are served by three operating departments, which are necessary for providing the two types of products: claims processing, administration, and sales. These three operating departments are supported by two departments: information technology and operations. The support provided by information technology and operations to the other departments is shown below.
| Support Departments | Operating Departments | ||||
|---|---|---|---|---|---|
| Information Technology | Operations | Claims Processing | Administration | Sales | |
| Information technology | — | 20% | 20% | 40% | 20% |
| Operations | 10% | — | 10 | 50 | 30 |
The total costs incurred in the five departments are:
| Information technology | $ 560,000 |
|---|---|
| Operations | 1,730,000 |
| Claims processing | 250,000 |
| Administration | 599,000 |
| Sales | 650,000 |
| Total costs | $ 3,789,000 |
Required:
Determine the total costs in each of the three operating departments, after departmental allocations, using (a) the direct method, (b) the step method (first for information technology going first in the allocation and then for operations going first), and (c) the reciprocal method. (Do not round intermediate calculations. Round final answers to the nearest dollar.)
Homework Answers
Problem 7-41 Departmental Cost Allocation; Service Company [LO 7-3, 7-5) Comprehensive Insurance Company has two p...
Problem 7-41 Departmental Cost Allocation; Service Company [LO 7-3, 7-5) Comprehensive Insurance Company has two product lines: health insurance and auto insurance. The two product lines are served by three operating departments which are necessary for providing the two types of products: claims processing, administration, and sales. These three operating departments are supported by two departments: information technology and operations. The support provided by information technology and operations to the other departments is shown below. Support Departments Operating Departments Information...
Please also show how you got each number! Thanks Problem 11-54 Cost Allocation: Step and Reciprocal...
Please also show how you got
each number! Thanks
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 Maintenance Processing Administration 50% Supplying Department Processing Administration Maintenance Direct cost 0 Branches 10% 60% 20% $4,400,000 Electronic 40% 40% 50% $1,700,000 15% $84,000 15% $540,000...
The following data is available for September 2017: DIRECT ALLOCATION DATA STEP-DOWN ALLOCATION DATA REQUIREMENTS O-books,...
The following data is available for September
2017:
DIRECT ALLOCATION DATA
STEP-DOWN ALLOCATION DATA
REQUIREMENTS
O-books, an online book retailer, has two operating departments—corporate sales and consumer sales—and two support departments—human resources and information systems. Each sales department conducts merchandising and marketing operations independently. O-books uses number of employees to allocate human resources costs and processing time to allocate information systems costs. The controller of 0-books reads a widely used textbook that states that "the reciprocal method is conceptually the...
Solve the allocation question with three methods. 1. direct method, 2. step down method. 3. reciprocal...
Solve the allocation question with three methods. 1.
direct method, 2. step down method. 3. reciprocal method.
Support Departments Plant Information Maintenance Systems Operating Departments Machining Assembly Total $600,000 $116,000 $400,000 $200,000 $1,316,000 Budgeted manufacturing overhead costs before any interdepartment cost allocations Support work furnished: By Plant Maintenance Budgeted labor-hours Percentage By Information Systems Budgeted computer-hours Percentage 1,600 20% 2,400 30% 4,000 50% 8,000 100% 200 10% 1,600 80X 200 10% 2,000 100%
15-34 Support-department cost allocations; single-department cost pools; direct, step-down, and r...
15-34 Support-department cost allocations; single-department cost pools; direct, step-down, and reciprocal methods. Sportz, Inc., manufactures athletic shoes and athletic clothing for both amateur and professional athletes. The company has two product lines (clothing and shoes), which are produced in separate manufacturing facilities; however, both manufacturing facilities share the same support services for information technology and human resources. The following shows total costs for each manufacturing facility and for each support department. Information technology (IT) Human resources (HR) Clothing Shoes Total...
Calculate the total overhead costs of the operating departments (Eastern and Western) after the supportdepartment costs...
Calculate the total overhead costs of the operating departments
(Eastern and Western) after the supportdepartment costs of
Engineering and Information Technology have been allocated using
the following methods (showing your calculations in tables and
footnotes, if needed):
a. direct method
b. step-down method (allocate Engineering first)
c. step-down method (allocate Information Technology first)
d. reciprocal method (be sure to show what equations were
used)
Support Departments Operating Departments Information Eastern Western Engineering Technology Department Department Total $300,000 $250,000 $650,000 $920,000...
Manhattan Partners provides management consulting services to government and corporate clients. Concord has two support departments---administrative services (AS) and information system (IS)---and t...
Manhattan Partners provides management consulting services to government and corporate clients. Concord has two support departments---administrative services (AS) and information system (IS)---and two operating departments---government consulting (GOVT) and corporate consulting (CORP). For the first quarter of 2017, Manhattan's cost records indicate the following: SUPPORT OPERATING AS IS GOVT CORP Total Budgeted overhead costs before any interdepartment cost allocations $390,000 $3,600,000 $8,750,000 $12,540,000 $25,280,000 Support work supplied by AS (budgeted head count) --- 20% 48% 32% 100% Support work supplied by...
i Data Table Bt ht SUPPORT OPERATING AS IS GOVT CORP Total no $ 600,000 $...
i Data Table Bt ht SUPPORT OPERATING AS IS GOVT CORP Total no $ 600,000 $ 2,400,000 $ 8,756,000 $ 12,452,000 $ 24,208,000 no Budgeted overhead costs before any interdepartment cost allocations Support work supplied by AS (budgeted head count) Support work supplied by IS (budgeted computer time) 0 25% 40% 35% 100% ות 10% 0 30% 60% 100% Print Done Direct method X Х 1 Support Departments Operating Departments AS IS GOVT CORP Total al 이 BE $ Direct...
Manhattan Partners provides management consulting Services to government and corporate clients Manhattan has two support departments...
Manhattan Partners provides management consulting Services to government and corporate clients Manhattan has two support departments administrative services (AS) and information systems (15) and two operating departments government consulting (GOT) and corporate consulting (CORP) For the first quarter of 2017. Manhattan's cost records indicate the following 11. Click the icon to view the cost records) The two support department costs have been allocated to the two operating departments in the direct method and the p-down method (AS department and the...
Problem 11-61 (Algo) Direct, Step, and Reciprocal Methods: Comparisons (LO 11-2, 3, 4) [The following information...
Problem 11-61 (Algo) Direct, Step, and Reciprocal Methods: Comparisons (LO 11-2, 3, 4) [The following information applies to the questions displayed below.] Gipps Business College (GBC) has two degree programs, undergraduate (UG) and graduate (GRAD) and three service departments, information technology (IT), Event Planning (EP), and Career Services (CS). The CFO of GBC is conducting a profitability analysis of the two programs and wants to include the appropriate costs of the service departments in the costs of the two degree...
Problem 7-41 Departmental Cost Allocation; Service Company [LO 7-3, 7-5) Comprehensive Insurance Company has two product lines: health insurance and auto insurance. The two product lines are served by three operating departments which are necessary for providing the two types of products: claims processing, administration, and sales. These three operating departments are supported by two departments: information technology and operations. The support provided by information technology and operations to the other departments is shown below. Support Departments Operating Departments Information...
Please also show how you got
each number! Thanks
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 Maintenance Processing Administration 50% Supplying Department Processing Administration Maintenance Direct cost 0 Branches 10% 60% 20% $4,400,000 Electronic 40% 40% 50% $1,700,000 15% $84,000 15% $540,000...
The following data is available for September
2017:
DIRECT ALLOCATION DATA
STEP-DOWN ALLOCATION DATA
REQUIREMENTS
O-books, an online book retailer, has two operating departments—corporate sales and consumer sales—and two support departments—human resources and information systems. Each sales department conducts merchandising and marketing operations independently. O-books uses number of employees to allocate human resources costs and processing time to allocate information systems costs. The controller of 0-books reads a widely used textbook that states that "the reciprocal method is conceptually the...
Solve the allocation question with three methods. 1.
direct method, 2. step down method. 3. reciprocal method.
Support Departments Plant Information Maintenance Systems Operating Departments Machining Assembly Total $600,000 $116,000 $400,000 $200,000 $1,316,000 Budgeted manufacturing overhead costs before any interdepartment cost allocations Support work furnished: By Plant Maintenance Budgeted labor-hours Percentage By Information Systems Budgeted computer-hours Percentage 1,600 20% 2,400 30% 4,000 50% 8,000 100% 200 10% 1,600 80X 200 10% 2,000 100%
15-34 Support-department cost allocations; single-department cost pools; direct, step-down, and reciprocal methods. Sportz, Inc., manufactures athletic shoes and athletic clothing for both amateur and professional athletes. The company has two product lines (clothing and shoes), which are produced in separate manufacturing facilities; however, both manufacturing facilities share the same support services for information technology and human resources. The following shows total costs for each manufacturing facility and for each support department. Information technology (IT) Human resources (HR) Clothing Shoes Total...
Calculate the total overhead costs of the operating departments
(Eastern and Western) after the supportdepartment costs of
Engineering and Information Technology have been allocated using
the following methods (showing your calculations in tables and
footnotes, if needed):
a. direct method
b. step-down method (allocate Engineering first)
c. step-down method (allocate Information Technology first)
d. reciprocal method (be sure to show what equations were
used)
Support Departments Operating Departments Information Eastern Western Engineering Technology Department Department Total $300,000 $250,000 $650,000 $920,000...
i Data Table Bt ht SUPPORT OPERATING AS IS GOVT CORP Total no $ 600,000 $ 2,400,000 $ 8,756,000 $ 12,452,000 $ 24,208,000 no Budgeted overhead costs before any interdepartment cost allocations Support work supplied by AS (budgeted head count) Support work supplied by IS (budgeted computer time) 0 25% 40% 35% 100% ות 10% 0 30% 60% 100% Print Done Direct method X Х 1 Support Departments Operating Departments AS IS GOVT CORP Total al 이 BE $ Direct...
Manhattan Partners provides management consulting Services to government and corporate clients Manhattan has two support departments administrative services (AS) and information systems (15) and two operating departments government consulting (GOT) and corporate consulting (CORP) For the first quarter of 2017. Manhattan's cost records indicate the following 11. Click the icon to view the cost records) The two support department costs have been allocated to the two operating departments in the direct method and the p-down method (AS department and the...
Problem 11-61 (Algo) Direct, Step, and Reciprocal Methods: Comparisons (LO 11-2, 3, 4) [The following information applies to the questions displayed below.] Gipps Business College (GBC) has two degree programs, undergraduate (UG) and graduate (GRAD) and three service departments, information technology (IT), Event Planning (EP), and Career Services (CS). The CFO of GBC is conducting a profitability analysis of the two programs and wants to include the appropriate costs of the service departments in the costs of the two degree...
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