Woodstock Binding has two service departments, IT (Information Technology) and HR (Human Resources), and two operating departments, Publishing and Binding. Management has decided to allocate IT costs on the basis of IT Tickets (issued with each IT request) in each department and HR costs on the basis of employees in each department.The following data appear in the company records for the current period: ITHRPublishingBindingIT tickets01,5002,4002,100Employees1602440Department direct costs$ 150,000$ 247,500$ 430,000$ 390,000 Required:Use the step method to allocate the service costs, using the following:The order of allocation starts with IT.Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations. Costs Allocated To:Costs Allocated To:Costs Allocated To:Costs Allocated To:From:ITHRPubishingBindingServicedepartmentcosts IT HR Total Costs$$$$

The service department costs can be allocated to other operating departments using various methods.…

Answered: Woodstock Binding has two service…

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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	IT	HR	Publishing	Binding
IT tickets	0	1,500	2,400	2,100
Employees	16	0	24	40
Department direct costs	$ 150,000	$ 247,500	$ 430,000	$ 390,000

Required:

Use the step method to allocate the service costs, using the following:
The order of allocation starts with IT.
Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations.

	Costs Allocated To:	Costs Allocated To:	Costs Allocated To:	Costs Allocated To:
From:	IT	HR	Pubishing	Binding
Service department costs
IT
HR
Total Costs	$	$	$	$

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