Interdepartment Services: Step Method O\'Brian\'s Department Stores allocates th

Question

Interdepartment Services: Step Method O'Brian's Department Stores allocates the costs of the Personnel and Payroll departments to three retail sales departments, Housewares, Clothing, and Furniture. In addition to providing services to the operating departments, Personnel and Payroll provide services to each other. O'Brian's allocates Personnel Department costs on the basis of the number of employees and Payroll Department costs on the basis of gross payroll. Cost and allocation information for June is as follows: Personnel Payroll Housewares Clothing Furniture Direct department cost $7,300 $3,800 $12,300 $20,000 $15,650 Number of employees 5 2 8 14 3 Gross payroll $6,100 $2,800 $10,800 $17,200 $8,500 (a) Determine the percentage of total Personnel Department services that was provided to the Payroll Department. (Round your answer to one decimal place.) Answer % (b) Determine the percentage of total Payroll Department services that was provided to the Personnel Department. (Round your answer to one decimal place.) Answer % (c) Prepare a schedule showing Personnel Department and Payroll Department cost allocations to the operating departments, assuming O'Brian's uses the step method. For each department below, enter the total costs calculated from your schedule.    Do not round until your final answers. Round answers to the nearest dollar. Service Departments Producing Departments Payroll Personnel Housewares Clothing Furniture Total costs $ Answer $ Answer $ Answer $ Answer $ Answer

Explanation / Answer

REQ A. SCHEDULE SHOWING OVERHEADS ALLOCATION PERSONNEL PAYROLL HOUSEWARES CLOTHING FURNITURE Number of employees 2 8 14 3 Percentage Allocation 7.41% 29.63% 51.85% 11.11% (Number of employees /Total number) % of Cost off Personnel deptt to payroll s 7.41% Req B: SCHEDULE SHOWING OVERHEADS ALLOCATION PERSONNEL PAYROLL HOUSEWARES CLOTHING FURNITURE Gross Payroll 0 0 10800 17200 8500 Percentage Allocation 0.00% 29.59% 47.12% 23.29% (Number of employees /Total number) % of Cost off Payroll deptt to personnel is 0% OVERHEHAD ALOCATION SUMMARY PERSONNEL PAYROLL HOUSEWARES CLOTHING FURNITURE Overheads cost 7300 3800 12300 20000 15650 Personnel Deptt oh -7300 541 2163 3785 811 (in 7.41:29.63:51.85:11.11) Payroll Deptt 0 -4341 1285 2045 1011 (in 29.59:47.12:23.29)) Total Overheads 0 0 15748 25830 17472

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.