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:

  
Required:
Use the reciprocal-services method to allocate the budgeted costs of the HR and Computing departments to the Deposit and Loan departments. (Round intermediate calculations and final answers to the nearest dollar amount.)

User of Service Provider of Service HR Computing HR — 15 % Computing 10 % — Deposit 60 % 50 % Loan 30 % 35 % Required Use the reciproc deportmerits (Round intermediste ce al-services method to allocate the budgeted costs of the HR and Computing departments to the Deposit and Loan Iculations and finat enswers to the nearest dollar amount.) ider of S Deposit Laan Allocation of HR Department costs Allocation of Computing Department costs Total costs allocated to each department

Explanation / Answer

Provider of Service Total Cost % Deposit Loan Allocation of HR Costs                     153,000 60%,30%       91,800             45,900 Allocation of Computing Dep                     229,500 50%,35%     114,750             80,325 Total Costs to the each Department   206,550 126,225

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