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 IT Repairs HR 0% Service department costs Repairs allocation HR allocation IT allocation Total costs allocated 10% 0% 10% IT 0% 20% The direct costs of the service departments in the previous period were $92,000 for Repairs, $111,600 for HR, and $207,000 for IT. Required: Use the direct method to allocate the service department costs to the production departments. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations.) M1 40% 35% 20% Repairs M2 60% 35% 70% HR IT M1 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 IT Repairs HR 0% Service department costs Repairs allocation HR allocation IT allocation Total costs allocated 10% 0% 10% IT 0% 20% The direct costs of the service departments in the previous period were $92,000 for Repairs, $111,600 for HR, and $207,000 for IT. Required: Use the direct method to allocate the service department costs to the production departments. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations.) M1 40% 35% 20% Repairs M2 60% 35% 70% HR IT M1 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 28E: Minor Co. has a job order cost system and applies overhead based on departmental rates. Service...

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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. Repair HR IT M1 M2 Repairs - 0% 0%` 40% 60% HR 10% - 20% 35% 35% IT 0% 10% - 20% 70% The direct costs of the service departments in the previous period were $20,000 for Repairs, $39,600 for HR, and $45,000 for IT. Required Use the direct method to allocate the service department costs to the production departments.