Tuscaloosa National Bank has two service departments, the Human Resources (HR) D

Question

Tuscaloosa National Bank has two service departments, the Human Resources (HR) Department and the Computing Department. The bank has two other departments that directly service customers, the Deposit Department and the Loan Department. The usage of the two service departments’ output for the year is as follows:

The budgeted costs in the two service departments for the year are as follows:

User of Service Provider of Service HR Computing HR — 15 % Computing 10 % — Deposit 60 % 50 % Loan 30 % 35 % Use the direct method to allocate the budgeted costs of the HR and Computing de (Do not round intermediate calculations. Required: Provider of ServiceDepositLoan HR Computing Total

Explanation / Answer

Budgeted cost allocation under Direct method :

Provider of service Deposit Loan HR 153000*6/9=102000 153000*3/9=51000 Computing 229500*50/85=135000 229500*35/85=94500 Total 237000 145500

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