Homework: chapter 15 HW Score: 0 of 30 pts E15-22 (similar to) Save 4 of 6 (0 co
ID: 2534640 • Letter: H
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Homework: chapter 15 HW Score: 0 of 30 pts E15-22 (similar to) Save 4 of 6 (0 complete) Hw Score: 0%, 0 of 190 pts Question Help l-books, an online book retailer, has two operating departments corporate sales and consumer sales-and two support departments human resources and information systems. The following data are available for September 2017: EE (click the icon to view the data.) (Click the icon to view additional information.) (Click the icon to view the direct allocation data.) (Click the icon to view the step-down allocation data.) Read the requirements. Requirement 1. Describe the key features of the reciprocal method. The reciprocal allocation method explicitly includes the mutual services provided V. Interdepartmental relationshipsflly incorporated into the support department cost allocations. Requirements Data Table 1. 2. Describe the key features of the reciprocal method. Allocate the support departments' costs (human resources and information systems) to the two operating departments using the reciprocal method. Use (a) linear equations and (b) repeated iterations. Support Departments Operating Departments Human Information Corporate Consumer Resources Systems Sales Sales 3. In the case presented in this exercise, which method (direct, step-down, or reciprocal) would you recommend? Why? Budgeted costs incurred before any $ 90,000 S227,000 S 991,000 482,000 interdepartment cost allccations Support work supplied by human resources department More Info Budgeted number of employees Support work supplied by information systems department 20 36 Each sales department conducts merchandising and marketing operations independently.books uses number of employees to allocate human resources costs and processing time to allocate information systems costs. The controler of I-books reads a widely used textbook that states that "the reciprocal method is conceptually the most defensible."He seeks your assistance. Budgeted processing time (in minutes) 400 2,520 1,080 Print Done PrintDone Check AnswerExplanation / Answer
1) Describe the features of Reciprocal Mehod?
Introduction: Reciprocal method is the one of the tool for to find cost information for supporting departments. it is very helpful for ascertained the each and every cost for each and every department wise.
Key features:
More accurate: its give picture of more accurate basis of results.
Stepdown method: its allocation and recognises overheagds for one department to another department.
cost centre: its does not generate revenue information but its generate cost information only so its helpful for to find out per unit cost and total cost
Profit centre: its generates revenue information and cost information also so its helpful to find out profit information and suggest for decision making also
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