Question

State Financial Corp. has three service departments (Administration, Communications, and Facilities), and two production departments (Deposits...

State Financial Corp. has three service departments (Administration, Communications, and Facilities), and two production departments (Deposits and Loans). A summary of costs and other data for each department prior to allocation of service department costs for the year ended December 31 follows.

Administration Communications Facilities Deposits Loans
Direct costs $ 170,000 $ 310,000 $ 250,000 $ 7,860,000 $ 4,700,000
Employee hours 28,500 33,000 21,000 478,000 381,000
Number of employees 7 17 8 220 170
Square footage occupied 4,700 13,500 5,200 243,200 203,500

  

The costs of the service departments are allocated on the following bases: Administration, employee-hours; Communications, number of employees; and Facilities, square footage occupied.

Required:

a. Assume that the bank elects to distribute service department costs to production departments using the direct method. What amount of Communications Department costs is allocated to the Deposits Department?

b. Assume the same method of allocation as in requirement (a). What amount of Administration Department costs is allocated to the Loans Department?

c. Assuming that the bank elects to distribute service department costs to other departments using the step method (starting with Facilities and then Communications), what amount of Facilities Department costs is allocated to the Communications Department?

d. Assume the same method of allocation as in requirement (c). What amount of Communication Department costs is allocated to Facilities?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

a.

Communication department cost to deposits department = $310,000 * 220/(220+170)

Communication department cost to deposits department = $310,000 * 220/390 = $174,872

b.

Administration department costs to loans department = $170,000 * 381,000/(478,000+381,000)

Administration department costs to loans department = $170,000 * 381,000/859,000 = $75,402

c.

Facilities department cost to communication department = $250,000 * 13,500/(4,700+13,500+243,200+203,500)

Facilities department cost to communication department = $250,000 * 13,500/464,900 = $7,260

d.

Communication department cost to facilities department = $0 (NIL)

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
State Financial Corp. has three service departments (Administration, Communications, and Facilities), and two production departments (Deposits...
State Financial Corp. has three service departments (Administration, Communications, and Facilities), and two production departments (Deposits and Loans). A summary of costs and other data for each department prior to allocation of service department costs for the year ended December 31 follows. Administration Communications Facilities Deposits Loans Direct costs $ 200,000 $ 330,000 $ 256,000 $ 7,520,000 $ 4,900,000 Employee hours 22,000 38,000 22,000 436,000 381,000 Number of employees 6 13 4 210 150 Square footage occupied 5,300 12,700 5,700...
State Financial Corp. has three service departments (Administration, Communications, and Facilities), and two production departments (Deposits...
State Financial Corp. has three service departments (Administration, Communications, and Facilities), and two production departments (Deposits and Loans). A summary of costs and other data for each department prior to allocation of service department costs for the year ended December 31 follows: Administration Communications Facilities Deposits Loans Direct costs $ 200,000 $ 300,000 $ 254,000 $ 8,000,000 $ 5,000,000 Employee-hours 24,800 33,600 21,600 450,000 350,000 Number of employees 9 15 6 210 150 Square footage occupied 4,900 13,440 5,600 246,400...
Av-Y6 Company operates three service departments, administration, maintenance, and personnel and two production departments, assembly and...
Av-Y6 Company operates three service departments, administration, maintenance, and personnel and two production departments, assembly and packaging. Information for the three service departments is given below: Admin Maint Person Directly traced overhead $65,000 $33,000 $74,000 Square feet occupied 2,000 3,500 3,000 Number of employees 42 24 30 Maintenance hours 2,500 2,000 4,000 Information for the two production departments is given below: Assembly Packaging Directly traced overhead $167,030 $114,090 Square feet occupied 2,100 1,400 Number of employees 36 18 Maintenance hours...
Av-Y6 Company operates three service departments, administration, maintenance, and personnel and two production departments, assembly and...
Av-Y6 Company operates three service departments, administration, maintenance, and personnel and two production departments, assembly and packaging. Information for the three service departments is given below: Admin Maint Person Directly traced overhead $69,000 $45,000 $78,000 Square feet occupied 2,000 3,500 3,000 Number of employees 36 24 30 Maintenance hours 2,500 2,000 4,000 Information for the two production departments is given below: Assembly Packaging Directly traced overhead $167,040 $122,090 Square feet occupied 2,100 1,400 Number of employees 42 18 Maintenance hours...
Av-Y6 Company operates three service departments, administration, maintenance, and personnel and two production departments, assembly and...
Av-Y6 Company operates three service departments, administration, maintenance, and personnel and two production departments, assembly and packaging. Information for the three service departments is given below: Admin Maint Person Directly traced overhead $69,000 $45,000 $78,000 Square feet occupied 2,000 3,500 3,000 Number of employees 36 24 30 Maintenance hours 2,500 2,000 4,000 Information for the two production departments is given below: Assembly Packaging Directly traced overhead $167,040 $122,090 Square feet occupied 2,100 1,400 Number of employees 42 18 Maintenance hours...
Anderson Enterprises has three service departments, Administration, Maintenance and security and two production departments, Machining and...
Anderson Enterprises has three service departments, Administration, Maintenance and security and two production departments, Machining and Assembly. Total Manufacturing overhead was either directly traced or allocated to all of the departments resulting gin a total of $300,000 of overhead in the Maintenance Department, $240,000 in the administration department, $135,000 in the security department, $1,000,000 in the machining department and $300,000 in the assembly department. The company allocates service department cost using the step method. The maintenance department overhead is allocated...
BluStar Company has two service departments, Administration and Accounting, and two operating departments, Domestic and International....
BluStar Company has two service departments, Administration and Accounting, and two operating departments, Domestic and International. Administration costs are allocated on the basis of employees, and Accounting costs are allocated on the basis of number of transactions. A summary of BluStar operations follows. Administration Accounting Domestic International Employees – 24 44 32 Transactions 32,000 – 24,000 96,000 Department direct costs $ 354,000 $ 148,000 $ 940,000 $ 3,710,000 Required: a. Allocate the cost of the service departments to the operating...
BluStar Company has two service departments, Administration and Accounting, and two operating departments, Domestic and International....
BluStar Company has two service departments, Administration and Accounting, and two operating departments, Domestic and International. Administration costs are allocated on the basis of employees, and Accounting costs are allocated on the basis of number of transactions. A summary of BluStar operations follows. Administration Accounting Domestic International Employees – 24 44 32 Transactions 32,000 – 24,000 96,000 Department direct costs $ 354,000 $ 148,000 $ 940,000 $ 3,710,000 Required: a. Allocate the cost of the service departments to the operating...
Wolfpack Company has two service departments and two production departments. Budgeted costs and budgeted activity in...
Wolfpack Company has two service departments and two production departments. Budgeted costs and budgeted activity in the various departments for the year are shown here: Custodial Cafeteria Cutting Assembly Departmental Costs 12,600 7,000 30,000 50,000 Square Feet Occupied 1,000 2,000 8,000 10,000 Number of Employees 20 30 150 200 Custodial service department costs are allocated on the basis of square feet of space occu- pied. The costs of the cafeteria are allocated on the basis of the number of employees....
Wizner Company has two service departments, Maintenance and Human Resources. Wizner Company also has two production...
Wizner Company has two service departments, Maintenance and Human Resources. Wizner Company also has two production departments, Mixing and Finishing. Maintenance costs are allocated based on square footage while Human Resources costs are allocated based on number of employees. The following information has been gathered for the current year: Human Maintenance Resources Mixing Finishing Direct costs $50,400 $33,600 $42,000 $70,000 Square footage 1,600 800 3,200 2,400 Number of employees 16 24 48 64 Assume the step-down method is used to...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT