The centralized computer technology department of Hardy Company has expenses of
ID: 2543818 • Letter: T
Question
The centralized computer technology department of Hardy Company has expenses of $320,000. The department has provided a total of 4,000 hours of service for the period. The Retail Division has used 2,750 hours of computer technology service during the period, and the Commercial Division has used 1,250 hours of computer technology service. How much should each division be charged for computer technology department services? Do not round interim calculations. Retail Division $ Commercial Division $
Explanation / Answer
Service Charges rate per hour (for centralized deptt.): Total Overheads / Total hours of service $ 320,000 /4,000 DLH = $ 80 per DLH Allocation of Services charges Department Rate Hours consumed Total Charges allocated Retail 80 2750 220000 Commercial 80 1250 100000
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