=+This problem illustrates how costs of two corporate support departments are allocated to operating divisions using the dual-rate method. Fixed costs are allocated using budgeted costs and budgeted hours used by other departments. Variable costs are allocated using actual costs and actual hours used by other departments.

Computer Horizons budgets the following amounts for its two central corporate support departments (Legal and Personnel) in supporting each other and the two manufacturing divisions, the Laptop Division (LTD) and the Work Station Division (WSD):

1 2

3 4

5 6

7 8

9 10 11 12 13 14 15 16 17 A B C ED F G Legal Department Personnel Department LTD WSD Total Budgeted usage

)sruoh( lageL 052 00520570051

)segatnecreP( 10% %001%03%06

)sruoh( lennosreP 005 2 000 05000 52005 22

)segatnecreP( %5 %001%05%54 Actual usage

)sruoh( lageL 004 000 2002 1400

%0 %001%06%02

—

—

—

—

—

—

—

—

—

—

)segatnecreP( 2

)sruoh( lennosreP 000 2 000 04004 11006 62

)segatnecreP( %5 %05.66 28.5% %001 Budgeted fixed overhead costs before any snoitacolla tsoc tnemtrapedretni 000 574$000 063$ 000 538$

Actual variable overhead costs before any snoitacolla tsoc tnemtrapedretni 0000 06$000 002$ 008$ 000 Support

—

—

Operating