Answered step by step
Verified Expert Solution
Question
1 Approved Answer
A company has two service departments and is planning to use the reciprocal method to allocate service department costs. The following information from operations was
A company has two service departments and is planning to use the reciprocal method to allocate service department costs. The following information from operations was collected for analysis. Budgeted overhead costs Human Resources $400,000 Data Processing 70,000 Machining 225,000 Assembly 125,000 Services furnished Labor Hours Human Resources to Data Processing 3,000 Machining 5,000 Assembly 8,200 Data Processing to Human Resources 600 Machining 3,500 Assembly 600 Which one of the following equations represents the complete reciprocated cost of the Data Processing Department? * A. $70,000 + [(600 + 4,700) * $400,000) Answer A is incorrect because This equation allocates Data Processing's use of Human Resources based on Human Resources' use of Data Processing. B. C. $400,000 + (600 + 16,200) * $70,000] $70,000 X (600 + 4,700) + $350,000 (3,000 + 16,200) $70,000+ [Fully Reciprocated Cost of Human Resources * (3,000 + 16,200)] D
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started