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Support Department Cost Allocation Fillory Illusion, Inc has two support departments, Human Resources and Janitorial, and two revenue departments, Entertainment and Protection. All costs are regarded as strictly variable. For November, the following is available: Support Department Revenue Departments Human Resources Janitorial Entertainment Protection Direct Costs 2$ 67,000 $20,000 2$ 128,000 $ 115,000 Actual Activity: Employees 20 Service Hours 120 510 170 REQUIRED: 1. If the company uses the direct method for allocating support department costs to revenue departments, what is the total cost allocated to Entertainment? What is the total cost allocated to Protection? 2. Assume the company uses the step method for allocating support department costs to revenue departments. The company begins with allocating the Human Resources Department cost first. What is the total cost allocated to Entertainment? What is the total cost allocated Protection? 3. Assume the company uses the algebraic (reciprocal) method for allocating support department costs to revenue departments. What are the equations that will determine the total cost of the support departments?

Support Department Cost Allocation Fillory Illusion, Inc has two support departments, Human Resources and Janitorial, and two revenue departments, Entertainment and Protection. All costs are regarded as strictly variable. For November, the following is available: Support Department Revenue Departments Human Resources Janitorial Entertainment Protection Direct Costs 2$ 67,000 $20,000 2$ 128,000 $ 115,000 Actual Activity: Employees 20 Service Hours 120 510 170 REQUIRED: 1. If the company uses the direct method for allocating support department costs to revenue departments, what is the total cost allocated to Entertainment? What is the total cost allocated to Protection? 2. Assume the company uses the step method for allocating support department costs to revenue departments. The company begins with allocating the Human Resources Department cost first. What is the total cost allocated to Entertainment? What is the total cost allocated Protection? 3. Assume the company uses the algebraic (reciprocal) method for allocating support department costs to revenue departments. What are the equations that will determine the total cost of the support departments?

Managerial Accounting
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 10E: Support department cost allocation comparison Refer to your answers to Exercises 7-9. Compare the...
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Download the file to complete the answer in Excel, then upload your file in the answer box Support Department Cost Allocation Fillory Illusion, Inc has two support departments, Human Resources and Janitorial, and two revenue departments, Entertainment and Protection. All costs are regarded as strictly variable. For November, the following is available: Support Department Revenue Departments Human Resources Janitorial Entertainment Protection Direct Costs $ 67,000 $20,000 $ 128,000 $ 115,000 Actual Activity: Employees 5 20 5 Service Hours 120 510 170 REQUIRED: 1. If the company uses the direct method for allocating support department costs to revenue departments, what is the total cost allocated to Entertainment? What is the total cost allocated to Protection? 2. Assume the company uses the step method for allocating support department costs to revenue departments. The company begins with allocating the Human Resources Department cost first. What is the total cost allocated to Entertainment? What is the total cost allocated Protection? 3. Assume the company uses the algebraic (reciprocal) method for allocating support department costs to revenue departments. What are the equations that will determine the total cost of the support departments?
Transcribed Image Text:Download the file to complete the answer in Excel, then upload your file in the answer box Support Department Cost Allocation Fillory Illusion, Inc has two support departments, Human Resources and Janitorial, and two revenue departments, Entertainment and Protection. All costs are regarded as strictly variable. For November, the following is available: Support Department Revenue Departments Human Resources Janitorial Entertainment Protection Direct Costs $ 67,000 $20,000 $ 128,000 $ 115,000 Actual Activity: Employees 5 20 5 Service Hours 120 510 170 REQUIRED: 1. If the company uses the direct method for allocating support department costs to revenue departments, what is the total cost allocated to Entertainment? What is the total cost allocated to Protection? 2. Assume the company uses the step method for allocating support department costs to revenue departments. The company begins with allocating the Human Resources Department cost first. What is the total cost allocated to Entertainment? What is the total cost allocated Protection? 3. Assume the company uses the algebraic (reciprocal) method for allocating support department costs to revenue departments. What are the equations that will determine the total cost of the support departments?
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