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2.5 4 points Problem 11-62 (Static) Allocate Service Department Costs: Direct and Step Methods (LO 11-1) Western Services has three service departments: Information Systems
2.5 4 points Problem 11-62 (Static) Allocate Service Department Costs: Direct and Step Methods (LO 11-1) Western Services has three service departments: Information Systems (IS), Personnel, and Administration. There are two operating departments: Residential and Commercial. A summary of costs and other data for each department prior to allocation of service department costs for the latest period follows: Number of IS service tickets eBook Number of employees Square footage occupied Print IS 75 Personnel Administration Residential 105 60 1,410 Commercial 20 3,900 25 8,000 12 3,800 138 16,100 940 162 69,500 The costs of the service departments and the allocation basis for each department follow. Department Direct Cost Allocation Base References Information Systems (IS) Personnel $ 14,000 IS service tickets 21,000 Employees Administration Required: 17,700 Square footage occupied a. Assume that the company allocates service department costs to production departments using the direct method. What amount of Information Systems (IS) Department costs will be allocated to the Commercial Department? b. Assume the same method of allocation as in requirement (a). What amount of Personnel Department costs is allocated to the Residential Department? c. Assuming that the company allocates service department costs to other departments using the step method (starting with Administration and then IS), what amount of Administration Department costs is allocated to the IS Department? d. Assume the same method of allocation as in requirement (c). What amount of IS Department costs is allocated to Administration? Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Assume that the company allocates service department costs to production departments using the direct method. What amount of Information Systems (IS) Department costs will be allocated to the Commercial Department? Note: Do not round intermediate calculations. Amount < Required A Required B >
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