O\'Brian\'s Department Stores allocates the costs of the Personnel and Payroll d
ID: 2415483 • Letter: O
Question
O'Brian's Department Stores allocates the costs of the Personnel and Payroll departments to three retail sales departments, Housewares, Clothing, and Furniture. In addition to providing services to the operating departments, Personnel and Payroll provide services to each other. O'Brian's allocates Personnel Department costs on the basis of the number of employees and Payroll Department costs on the basis of gross payroll. Cost and allocation information for June is as follows:
%
(c) Prepare a schedule showing Personnel Department and Payroll Department cost allocations to the operating departments, assuming O'Brian's uses the step method.
Do not round until your final answers. Round answers to the nearest dollar.
Personel Payroll Housewares Clothing Furniture Direct department cost $6,500 $3,300 $11,900 $20,000 $16,350 Number of employees 5 3 9 15 3 Gross payroll $6,400 $3,400 $11,400 $17,800 $8,000Explanation / Answer
Personnel Payroll Housewares Clothing Furniture Direct Cost 6500 3300 11900 20000 16350 -6500 Allocation of personnel cost 928.5714 557.1429 1671.429 2785.714 557.1429 -3857.14 Allocation of Payroll Cost 525.228 279.0274 935.5623 1460.79 656.535 -1453.8 Allocation of personnel cost 207.6856 124.6114 373.8341 623.0569 124.6114 -403.639 Allocation of Payroll Cost 54.96357 29.1994 97.90386 152.8674 68.70447 -262.649 Allocation of personnel cost 37.52131 22.51279 67.53837 112.5639 22.51279 -51.7122 Allocation of Payroll Cost 7.041659 3.740882 12.54296 19.58462 8.802074 -44.563 Allocation of personnel cost 6.366139 3.819683 11.45905 19.09842 3.819683 -7.56057 Allocation of Payroll Cost 1.029524 0.546934 1.833839 2.863363 1.286905 -7.39566 Allocation of personnel cost 1.056523 0.633914 1.901742 3.16957 0.633914 -1.18085 Allocation of Payroll Cost 0.160796 0.085423 0.286419 0.447215 0.200995 -1.21732 -0.08542 Net Allocation to operation dep 0.405773 0.676289 0.135258 0.026178 0.040874 0.018371 Total allocated cost 0 0 15074.72 25180.87 17794.4 Allocation of personnel to payroll 708.7206 %age 10.90% Allocation of payroll to personnel 588.4235 %age 17.83%
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