Western Services has three service departments: Information Systems (IS), Personnel, and Administration. There are two operating departments: Residential and Commercial. A summary of costs and other data for each department prior to allocation of service department costs for the latest period follows: ISPersonnelAdministrationResidentialCommercialNumber of IS service tickets1251551101,410940Number of employees707562138162Square footage occupied3,9008,0003,80016,10069,500The costs of the service departments and the allocation basis for each department follow.DepartmentDirect CostAllocation BaseInformation Systems (IS)$ 24,000IS service ticketsPersonnel31,000EmployeesAdministration27,700Square footage occupiedRequired:Assume that the company allocates service department costs to production departments using the direct method. What amount of Information Systems (IS) Department costs will be allocated to the Commercial Department?Assume the same method of allocation as in requirement (a). What amount of Personnel Department costs is allocated to the Residential Department?Assuming that the company allocates service department costs to other departments using the step method (starting with Administration and then IS), what amount of Administration Department costs is allocated to the IS Department?Assume the same method of allocation as in requirement (c). What amount of IS Department costs is allocated to Administration?REQUIRED A . AMOUNT: ?? REQUIRED B : AMOUNT: ?? REQUIRED C AMOUNT: ?? REQUIRED D AMOUNT: ?? Need help,

Secondary distribution statementMeans a statement in which overhead of service department are…

Answered: Required: Assume that the company…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter5: Support Department And Joint Cost Allocation

Section: Chapter Questions

Problem 1CMA

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Assume that the company allocates service department costs to production departments using the direct method. What amount of Information Systems (IS) Department costs will be allocated to the Commercial Department?
Assume the same method of allocation as in requirement (a). What amount of Personnel Department costs is allocated to the Residential Department?
Assuming that the company allocates service department costs to other departments using the step method (starting with Administration and then IS), what amount of Administration Department costs is allocated to the IS Department?
Assume the same method of allocation as in requirement (c). What amount of IS Department costs is allocated to Administration?

REQUIRED A .

AMOUNT: ??

REQUIRED B :

AMOUNT: ??

REQUIRED C

AMOUNT: ??

REQUIRED D

AMOUNT: ??

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	IS	Personnel	Administration	Residential	Commercial
Number of IS service tickets	125	155	110	1,410	940
Number of employees	70	75	62	138	162
Square footage occupied	3,900	8,000	3,800	16,100	69,500

The costs of the service departments and the allocation basis for each department follow.

Department	Direct Cost	Allocation Base
Information Systems (IS)	$ 24,000	IS service tickets
Personnel	31,000	Employees
Administration	27,700	Square footage occupied

REQUIRED D

AMOUNT: ??

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