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Bens Corporation has three service departments (Repairs, HR, and IT) and two production departments (M1 and M2). The following usage data for each of
Bens Corporation has three service departments (Repairs, HR, and IT) and two production departments (M1 and M2). The following usage data for each of the service departments for the previous period follow. Repairs HIL IT Repairs HR IT MI M2 0% % 40% 60% 10% ex 20% 35% 35% 10x 20% 70% The direct costs of the service departments in the previous period were $20,000 for Repairs, $39,600 for HR, and $45,000 for IT. Required: Use the step method to allocate the service department costs to the production departments. Allocate HR costs first, followed by IT. and then Repairs. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations.) Repairs HR IT M1 M2 Service department costs $ HR allocation 20,000 $ 3,960 39,600 $ IT allocation 0 45,000 $ 7,920 (52,920) 0$ 0 13,860 13,860 Repairs allocation (23,960) Total costs allocated $ 0 $ 0 39,600 $ 0 0 $ 13,860 $ 13,860
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