1) | Direct Method |
Particulars | IT | EP | CS | UG | GRAD | ||
Total Costs | $ 70,000.00 | $ 90,000.00 | $ 100,000.00 | ||||
Distribution of : | |||||||
IT | $ (70,000.00) | $ 40,000.00 | $ 30,000.00 | ||||
EP | $ (90,000.00) | $ 30,000.00 | $ 60,000.00 | ||||
CS | $ (100,000.00) | $ 60,000.00 | $ 40,000.00 | ||||
Total | $ 130,000.00 | $ 130,000.00 |
2) | Step Method |
Particulars | IT | EP | CS | UG | GRAD | ||
Total Costs | $ 70,000.00 | $ 90,000.00 | $ 100,000.00 | ||||
Distribution of: | |||||||
IT | $ (70,000.00) | $ 7,000.00 | $ 14,000.00 | $ 28,000.00 | $ 21,000.00 | ||
$ - | $ 97,000.00 | $ 114,000.00 | $ 28,000.00 | $ 21,000.00 | |||
EP | $ (97,000.00) | $ 24,250.00 | $ 24,250.00 | $ 48,500.00 | |||
$ - | $ - | $ 138,250.00 | $ 52,250.00 | $ 69,500.00 | |||
CS | $ (138,250.00) | $ 82,950.00 | $ 55,300.00 | ||||
Total | $ - | $ - | $ - | $ 135,200.00 | $ 124,800.00 |
3) | Reciprocal Method |
Let the total cost of Dept. IT be "x" and that of EP and CS be "y" and "z" | |||||||||
Therefore, x = $ 70,000 | y = $ 90000 + 10% of x | z = $ 100,000 + 20% of x + 25% of y | |||||||
or, y = $ 95,000 + 0.1x…(1) | or, z = $ 100,000 + 0.2x + 0.25y…(2) |
Now, putting the value of "x" (1), we get | |||
y = $ 90,000 + 0.1 ($ 70,000) | |||
y = $ 97,000 |
Now, putting the value of "x" and "y" in (2) | |||
z = $ 100,000 + 0.2( $ 70,000) + 0.25 ($ 97,000) | |||
z = $ 138,250 |
Particulars | IT | EP | CS | UG | GRAD | ||
Total Costs | $ 70,000.00 | $ 90,000.00 | $ 100,000.00 | - | - | ||
Distribution of: | |||||||
IT | $ (70,000.00) | $ 7,000.00 | $ 14,000.00 | $ 28,000.00 | $ 21,000.00 | ||
$ - | $ 97,000.00 | $ 114,000.00 | $ 28,000.00 | $ 21,000.00 | |||
EP | $ (97,000.00) | $ 24,250.00 | $ 24,250.00 | $ 48,500.00 | |||
$ - | $ - | $ 138,250.00 | $ 52,250.00 | $ 69,500.00 | |||
CS | $ (138,250.00) | $ 82,950.00 | $ 55,300.00 | ||||
$ - | $ - | $ - | $ 135,200.00 | $ 124,800.00 |
(LO 11-2, 3, 4) Gipps Business College (GBC) has two degree programs, undergraduate (UG) and graduate (GRAD) and three...
Required information [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 programs. As a part of the analysis, the CFO has collected...
Required information 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 programs. As a part of the analysis, the CFO has collected...
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...
Exercise 11-31 Cost Allocation: Reciprocal Method (LO 11-4) Caro Manufacturing has two production departments, Machining and Assembly, and two service departments, Maintenance and Cafeteria. Direct costs for each department and the proportion of service costs used by the various departments for the month of August follow: Proportion of Services Used b Direct CostsMaintenance Cafeteria Department Machining Assembly Maintenance Cafeteria Machining Assembly $99,000 64,400 40,000 32,000 0.5 0.3 0.1 0.2 0.8 Required Use the reciprocal method to allocate the service costs....
Midland Resources has two production departments (Fabrication and Assembly) and three service departments (Engineering, Administration, and Maintenance). During July, the following costs and service department usage ratios were recorded. Engineering Supplying Department Engineering Administration Maintenance Direct cost Using Department Administration Maintenance 40% 25% 20% $246,500 $40,000 20% Fabrication 15% 45% 30% $220,000 Assembly 45% 10% 50% $80,000 $38,000 Required: Allocate the service department costs to the two operating departments using the reciprocal method. (Do not round intermediate calculations.) Allocated to:...
instructions help Homework #11 - Chapter 11 Question 1 (of 4) Save & Exit Submit 1 value: 5.00 points Problem 11-54 Cost Allocation: Step and Reciprocal Methods (LO 11-3, 4) Great Easterm 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 Supplying Department Processing Electronic 40% 40% 60% $1,750,000 Processing Administration Branches 10% 60% 15% 50%...
Midland Resources has two production departments (Fabrication and Assembly) and three service departments (Engineering, Administration, and Maintenance). During July, the following costs and service department usage ratios were recorded. 0.76 points Engineering Fabrication 15% Supplying Department Engineering Administration Maintenance Direct cost 20% Using Department Administration Maintenance 40% 25% 20% $ 222,800 $40,000 45% 30% $ 205,000 45% 10% 50% $50,000 $32,000 eBook Required: Allocate the service department costs to the two operating departments using the reciprocal method. (Do not round...
Midland Resources has two production departments (Fabrication and Assembly) and three service departments (Engineering, Administration, and Maintenance). During July, the following costs and service department usage ratios were recorded. 1.15 points Engineering Supplying Department Engineering Administration Maintenance Direct cost Using Department Administration Maintenance Fabrication 40% 0 15% 25% 45% 30% 15% $248,550 $ 45,000 $230,000 Skipped 208 Assembly 45% 10% 55% $80,000 $ 42,000 eBook References Required: Allocate the service department costs to the two operating departments using the reciprocal...
Midland Resources has two production departments (Fabrication and Assembly) and three service departments (Engineering, Administration, and Maintenance). During July, the following costs and service department usage ratios were recorded: Supplying Department Using Department Engineering Administration Maintenance Fabrication Assembly Engineering 0 60 % 0 20 % 20 % Administration 15 % 0 10 % 50 % 25 % Maintenance 0 20 % 0 20 % 60 % Direct cost $ 58,000 $ 329,000 $ 50,000 $ 270,000 $ 90,000 Required: Allocate...
Midland Resources has two production departments (Fabrication and Assembly) and three service departments (Engineering, Administration, and Maintenance). During July, the following costs and service department usage ratios were recorded: Supplying Department Using Department Engineering Administration Maintenance Fabrication Assembly Engineering 0 60 % 0 20 % 20 % Administration 15 % 0 10 % 50 % 25 % Maintenance 0 20 % 0 30 % 50 % Direct cost $ 50,000 $ 290,300 $ 45,000 $ 250,000 $ 90,000 Supplying Department...