Mackenzie Mining has two operating divisions, Northern and Southern, that share the common costs of the company’s human resources (HR) department. The annual costs of the HR department total $20,000,000 a year. You have the following selected information about the two divisions: Number of EmployeesWage and Salary Expense ($000)Northern2,640$ 210,800Southern2,160129,200Required:Determine the cost allocation if $12.5 million of the HR costs are fixed and allocated on the basis of employees, and the remaining costs, which are variable, are allocated on the basis of the wage and salary expense total.Note: Do not round intermediate calculations. Enter your answers in dollars, not in millions or thousands.

The costs are allocated to different departments on the basis of different cost ratios allocation.…

Answered: Mackenzie Mining has two operating…

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter4: Accounting For Factory Overhead

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	Number of Employees	Wage and Salary Expense ($000)
Northern	2,640	$ 210,800
Southern	2,160	129,200

Required:

Determine the cost allocation if $12.5 million of the HR costs are fixed and allocated on the basis of employees, and the remaining costs, which are variable, are allocated on the basis of the wage and salary expense total.

Note: Do not round intermediate calculations. Enter your answers in dollars, not in millions or thousands.

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