Bens Corporation has three service departments (Repairs, HR, and IT) and two production departments (M1 and M2). The following usage data for each of the service departments for the previous period follow. Repairs HR Repairs HR OR 10% 10% ON IT Service department costs HR allocation IT allocation 08 20% M1 40% 35% 20% Repairs M2 60% The direct costs of the service departments in the previous period were $76,000 for Repairs, $95,600 for HR, and $171,000 for IT. Required: Use the step method to allocate the service department costs to the production departments. Allocate HR costs first, followed by IT, and then Repairs. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.) 35% 70% HR IT M2

Bens Corporation has three service departments (Repairs, HR, and IT) and two production departments (M1 and M2). The following usage data for each of the service departments for the previous period follow. Repairs HR Repairs HR OR 10% 10% ON IT Service department costs HR allocation IT allocation 08 20% M1 40% 35% 20% Repairs M2 60% The direct costs of the service departments in the previous period were $76,000 for Repairs, $95,600 for HR, and $171,000 for IT. Required: Use the step method to allocate the service department costs to the production departments. Allocate HR costs first, followed by IT, and then Repairs. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.) 35% 70% HR IT M2

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter7: Allocating Costs Of Support Departments And Joint Products

Section: Chapter Questions

Problem 30E: A company uses charging rates to allocate service department costs to the using departments. The...

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