Human Resources Custodial Dept A Dept B Dept C Dept D TOTAL Support Services Pro

Question

Human Resources Custodial Dept A Dept B Dept C Dept D TOTAL Support Services Provided: Human Resources Budgeted Employees 25 200 375 300 100 1,000 Percentage 0% Custodial Budgeted square footage                     800                  1,200                  3,800                  2,000                  2,200 10,000 Percentage 0% Direct Allocation Method Overhead Costs before allocation $1,250,000 $1,200,000 $4,500,000 $9,400,000 $7,000,000 $4,650,000 $28,000,000 Allocation of Human Resources 0 Allocation of Custodial 0 Totals $1,250,000 $1,200,000 $4,500,000 $9,400,000 $7,000,000 $4,650,000 $28,000,000 Step Down Allocation Method: HR first, then Custodial Overhead Costs before allocation $1,250,000 $1,200,000 $4,500,000 $9,400,000 $7,000,000 $4,650,000 $28,000,000 Allocation of Human Resources $0 $1,200,000 Allocation of Custodial $0 Totals $1,250,000 $1,200,000 $4,500,000 $9,400,000 $7,000,000 $4,650,000 $28,000,000 Reciprocal Method Overhead Costs before allocation $1,250,000 $1,200,000 $4,500,000 $9,400,000 $7,000,000 $4,650,000 $28,000,000 Allocation of Human Resources Allocation of Custodial Totals $1,250,000 $1,200,000 $4,500,000 $9,400,000 $7,000,000 $4,650,000 $28,000,000 Human Resources Custodial Dept A Dept B Dept C Dept D TOTAL Support Services Provided: Human Resources Budgeted Employees 25 200 375 300 100 1,000 Percentage 0% Custodial Budgeted square footage                     800                  1,200                  3,800                  2,000                  2,200 10,000 Percentage 0% Direct Allocation Method Overhead Costs before allocation $1,250,000 $1,200,000 $4,500,000 $9,400,000 $7,000,000 $4,650,000 $28,000,000 Allocation of Human Resources 0 Allocation of Custodial 0 Totals $1,250,000 $1,200,000 $4,500,000 $9,400,000 $7,000,000 $4,650,000 $28,000,000 Step Down Allocation Method: HR first, then Custodial Overhead Costs before allocation $1,250,000 $1,200,000 $4,500,000 $9,400,000 $7,000,000 $4,650,000 $28,000,000 Allocation of Human Resources $0 $1,200,000 Allocation of Custodial $0 Totals $1,250,000 $1,200,000 $4,500,000 $9,400,000 $7,000,000 $4,650,000 $28,000,000 Reciprocal Method Overhead Costs before allocation $1,250,000 $1,200,000 $4,500,000 $9,400,000 $7,000,000 $4,650,000 $28,000,000 Allocation of Human Resources Allocation of Custodial Totals $1,250,000 $1,200,000 $4,500,000 $9,400,000 $7,000,000 $4,650,000 $28,000,000

Explanation / Answer

Human Resources Custodial Dept A Dept B Dept C Dept D TOTAL Support Services Provided: Human Resources Budgeted Employees 25 200 375 300 100 1,000 Percentage 0% Custodial Budgeted square footage                     800                  1,200                  3,800                  2,000                  2,200 10,000 Percentage 0% Direct Allocation Method Overhead Costs before allocation $1,250,000 $1,200,000 $4,500,000 $9,400,000 $7,000,000 $4,650,000 $28,000,000 Allocation of Human Resources $163,043 $516,304 $271,739 $298,914 $1,250,000 Allocation of Custodial $246,154 461538 $369,231 $123,077 $1,200,000 Totals $1,250,000 $1,200,000 $4,909,197 $10,377,842 $7,640,970 $5,071,991 $30,450,000 Step Down Allocation Method: HR first, then Custodial Overhead Costs before allocation $1,250,000 $1,200,000 $4,500,000 $9,400,000 $7,000,000 $4,650,000 $28,000,000 Allocation of Human Resources $163,043 $516,304 $271,739 $298,914 $1,250,000 $1,200,000 Allocation of Custodial $246,154 461538 $369,231 $123,077 $1,200,000 Totals $1,250,000 $1,200,000 $4,909,197 $10,377,842 $7,640,970 $5,071,991 $30,450,000 Reciprocal Method Overhead Costs before allocation $1,250,000 $1,200,000 $4,500,000 $9,400,000 $7,000,000 $4,650,000 $28,000,000 Allocation of Human Resources $163,043 $516,304 $271,739 $298,914 $1,250,000 Allocation of Custodial $246,154 461538 $369,231 $123,077 $1,200,000 Totals $1,250,000 $1,200,000 $4,909,197 $10,377,842 $7,640,970 $5,071,991 $30,450,000

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