O'Brian's Department Stores allocates the costs of the Personnel and Payroll departments to three retail sales departments, Housewares, Clothing, and Furniture. In addition to providing services to the operating departments, Personnel and Payroll provide services to each other. O'Brian's allocates Personnel Department costs on the basis of the number of employees and Payroll Department costs on the basis of gross payroll. Cost and allocation information for June is as follows: Direct department cost Number of employees Gross payroll Personnel Payroll Housewares Clothing Furniture $7,300 $3,800 $12,300 $20,000 $15,650 5 2 $6,100 $2,800 8 14 3 $10,800 $17,200 $8,500 (a) Determine the percentage of total Personnel Department services that was provided to the Payroll Department. (Round your answer to one decimal place.) 12.5 X% (b) Determine the percentage of total Payroll Department services that was provided to the Personnel Department. (Round your answer to one decimal place.) 17 X% (c) Prepare a schedule showing Personnel Department and Payroll Department cost allocations to the operating departments, assuming O'Brian's uses the step method.
O'Brian's Department Stores allocates the costs of the Personnel and Payroll departments to three retail sales departments, Housewares, Clothing, and Furniture. In addition to providing services to the operating departments, Personnel and Payroll provide services to each other. O'Brian's allocates Personnel Department costs on the basis of the number of employees and Payroll Department costs on the basis of gross payroll. Cost and allocation information for June is as follows: Direct department cost Number of employees Gross payroll Personnel Payroll Housewares Clothing Furniture $7,300 $3,800 $12,300 $20,000 $15,650 5 2 $6,100 $2,800 8 14 3 $10,800 $17,200 $8,500 (a) Determine the percentage of total Personnel Department services that was provided to the Payroll Department. (Round your answer to one decimal place.) 12.5 X% (b) Determine the percentage of total Payroll Department services that was provided to the Personnel Department. (Round your answer to one decimal place.) 17 X% (c) Prepare a schedule showing Personnel Department and Payroll Department cost allocations to the operating departments, assuming O'Brian's uses the step method.
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
Section: Chapter Questions
Problem 9E: A manufacturing company has two service and two production departments. Human Resources and Machine...
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Question
![Interdepartment Services: Step Method
O'Brian's Department Stores allocates the costs of the Personnel and Payroll departments to three retail sales
departments, Housewares, Clothing, and Furniture. In addition to providing services to the operating departments,
Personnel and Payroll provide services to each other. O'Brian's allocates Personnel Department costs on the basis
of the number of employees and Payroll Department costs on the basis of gross payroll. Cost and allocation
information for June is as follows:
Direct department cost
Number of employees
Gross payroll
Personnel Payroll Housewares Clothing Furniture
$7,300 $3,800
$12,300 $20,000
$15,650
5
Total costs $
2
$6,100 $2,800
Payroll
0
(a) Determine the percentage of total Personnel Department services that was provided to the Payroll Department.
(Round your answer to one decimal place.)
12.5
X%
(b) Determine the percentage of total Payroll Department services that was provided to the Personnel Department.
(Round your answer to one decimal place.)
17
X%
$
8
(c) Prepare a schedule showing Personnel Department and Payroll Department cost allocations to the operating
departments, assuming O'Brian's uses the step method.
14
$10,800 $17,200
For each department below, enter the total costs calculated from your schedule.
Do not round until your final answers. Round answers to the nearest dollar.
Service Departments
Producing Departments
Personnel
0
$
3
$8,500
Housewares
0X $
Clothing
0X $
Furniture
18,700 X](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F67eeef0b-e6a8-43af-a851-bbb71fd1c3af%2Fea5f78d4-cf61-4386-943d-a5c46943504e%2Feeyokl8_processed.png&w=3840&q=75)
Transcribed Image Text:Interdepartment Services: Step Method
O'Brian's Department Stores allocates the costs of the Personnel and Payroll departments to three retail sales
departments, Housewares, Clothing, and Furniture. In addition to providing services to the operating departments,
Personnel and Payroll provide services to each other. O'Brian's allocates Personnel Department costs on the basis
of the number of employees and Payroll Department costs on the basis of gross payroll. Cost and allocation
information for June is as follows:
Direct department cost
Number of employees
Gross payroll
Personnel Payroll Housewares Clothing Furniture
$7,300 $3,800
$12,300 $20,000
$15,650
5
Total costs $
2
$6,100 $2,800
Payroll
0
(a) Determine the percentage of total Personnel Department services that was provided to the Payroll Department.
(Round your answer to one decimal place.)
12.5
X%
(b) Determine the percentage of total Payroll Department services that was provided to the Personnel Department.
(Round your answer to one decimal place.)
17
X%
$
8
(c) Prepare a schedule showing Personnel Department and Payroll Department cost allocations to the operating
departments, assuming O'Brian's uses the step method.
14
$10,800 $17,200
For each department below, enter the total costs calculated from your schedule.
Do not round until your final answers. Round answers to the nearest dollar.
Service Departments
Producing Departments
Personnel
0
$
3
$8,500
Housewares
0X $
Clothing
0X $
Furniture
18,700 X
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