e reciprocal method s es costs and p ually the most de ick the icon to v Data Ta
ID: 2587595 • Letter: E
Question
e reciprocal method s es costs and p ually the most de ick the icon to v Data Table ick the icon to Table Support Departments Human Information Corporate Consumer cate the support rement 1. Alloca Resources Systems Sales Sales method Budgéted costs incurred during any we can allocate ment. Then ofl-in for each support 78,000 S 236,000 $ 995,000 $ 482,000 interdepartment cost allocations Support work supplied by human resources department Budgeted number of employees 41 31 allocate the suppor decimal places s. Complete all an Support work supplied by information percentages to ts by allocating systems department Budgeted processing time (in minutes) 320 1.920 1,600 Print Done sts incurred ose from any list or enter any number in the input fields and then click Check Answer Clear AllExplanation / Answer
Total HR cost = $78,000 + 8.333% of Info Systems cost
Total Info Systems cost = $236,000 + 23.404% of HR cost
Assume, Total HR cost to be A
Assume Total Info Systems cost to be B
Total HR cost = A = 78,000 + 8.333% of B
Total HR cost = A = 78,000 + 8.333% (236,000 + 23.404% of A)
Total Info Systems cost = B = 236,000 + 23.404% of A
Total Info Systems cost = B = 236,000 + 23.404% of (78,000 + 8.33% of B)
Solving the equations,
A = 78,000 + 8.333% x (236,000 + 23.404% of A)
A = 78,000 + 19,667 + 0.0195A
0.981A = 97,667
A = 97,667/76.596= $99,608
Hence, total cost of HR = A = $99,608
Total cost of Info Systems = B = 236,000 + 23.404% of 99,608
B = 236,000 + 23,312 = $259,312
Support Departments
Operating Departments
Total
HR
Info Systems
Corporate
Consumer
Cost incurred
$78,000
$236,000
$995,000
$482,000
$1,791,000
Allocation of HR costs
($99,608)
$23,312
$43,447
$32,850
$0
Allocation of Info Systems costs
$21,609
($259,312)
$129,656
$108,047
$0
total costs
$1,168,103
$622,897
$1,791,000
Support Departments
Operating Departments
HR
Info Systems
Corporate
Consumer
Costs incurred
$99,608
$259,312
$1,168,103
$622,897
Determination of percentages:
Support Departments
Operating Departments
Total
HR
Info Systems
Corporate
Consumer
Support supplied by HR
Budgeted number of employees
22
41
31
94
Percentage
23.404%
43.617%
32.979%
100%
Support supplied by Info Systems-
Budgeted processing time
320
1,920
1,600
3,840
percentage
8.333%
50%
41.666%
100%
Support Departments
Operating Departments
Total
HR
Info Systems
Corporate
Consumer
Cost incurred
$78,000
$236,000
$995,000
$482,000
$1,791,000
Allocation of HR costs
($99,608)
$23,312
$43,447
$32,850
$0
Allocation of Info Systems costs
$21,609
($259,312)
$129,656
$108,047
$0
total costs
$1,168,103
$622,897
$1,791,000
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