5 Points

Hagrid Corp, a local producer of supplies for magical pets, has two service departments, Maintenance and Personnel. Maintenance Department costs of $320,000 are allocated on the basis of budgeted maintenance-hours. Personnel Department costs of $200,000 are allocated based on the number of employees. The costs of operating two of the producing departments, Toys and Treats, are $208,000 and $312,000, respectively. Data on budgeted maintenance-hours and number of employees for December 2020 are as follows:

Q1.1

1 Point

Assume Hagrid Corp uses the step-down method to allocate costs of service departments, and that the service department with the highest percentage of interdepartmental support service is allocated first. What percentage of interdepartmental support service does Personnel provide to other departments? Maintenance? show your work

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Q1.2

2 Points

What will be the total cost attributed to the (a) Toys department after allocation of service department costs? (b) Treats department after allocation of service department costs?

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Q1.3

2 Points

Assume Hagrid Corp uses the direct method to allocate costs of service departments. What will be the total cost attributed to the (a) Toys department after allocation of service department costs? (b) Treats department after allocation of service department costs?

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Number of employees Budgeted maintenance hours 1,230 690 270 630 Department Toys Treats Maintenance Personnel Totals 50 860 2,780 950