AD232425 b) Using the step-down method, what are the total costs of the operating departments after26 support costs are allocated if the support department having the highest cost is allocatedfirst?789D1c) Using the reciprocal method, what are the total costs of the operating departments aftersupport costs are allocated? 2345678A1 Period Cost Allocation MethodsCement Plus has two support departments, Information Systems and Personnel. TheInformation Systems Department costs of $120,000 are allocated on the basis of hours used.The Personnel Department costs of $30,000 are allocated based on the number of employees.Costs of the two operating departments are $60,000 for Bricks and $90,000 for Bars.Data on information systems hours used and number of employees are as follows:9Allocation Bases:O Information systems hours used1 Number of employees2InformationSystems•10DPersonnel600EBricks72040FBars480120Required:a) Using the direct method, what are the total costs of the operating departments aftersupport costs are allocated

Direct Method Particulars Basis of Apportionment Bricks Bars Information Systems Personnel…

Answered: reciprocal method

Business

Accounting

reciprocal method

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 19E: Refer to the data in Exercise 7.18. When the capacity of the HR Department was originally...

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Question

A
D
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25 b) Using the step-down method, what are the total costs of the operating departments after
26 support costs are allocated if the support department having the highest cost is allocated
first?
7
8
9
D
1
c) Using the reciprocal method, what are the total costs of the operating departments after
support costs are allocated?

23
4
5
6
7
8
A
1 Period Cost Allocation Methods
Cement Plus has two support departments, Information Systems and Personnel. The
Information Systems Department costs of $120,000 are allocated on the basis of hours used.
The Personnel Department costs of $30,000 are allocated based on the number of employees.
Costs of the two operating departments are $60,000 for Bricks and $90,000 for Bars.
Data on information systems hours used and number of employees are as follows:
9
Allocation Bases:
O Information systems hours used
1 Number of employees
2
Information
Systems
•
10
D
Personnel
600
E
Bricks
720
40
F
Bars
480
120
Required:
a) Using the direct method, what are the total costs of the operating departments after
support costs are allocated

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