Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Breakfast Bars has two support departments, Information Systems and Personnel. The Information Systems Department costs of $120,000 are allocated on the basis of hours

image text in transcribed

Breakfast Bars has two support departments, Information Systems and Personnel. The Information Systems Department costs of $120,000 are allocated on the basis of hours used. The Personnel Department costs of $30,000 are allocated based on the number of employees. Costs of the two operating departments are $60,000 for Fruit Bars and $90,000 for Nut Bars. Data on information systems hours used and number of employees are as follows: Information Allocation Bases: Systems Personnel Fruit Nut Information systems hours used Number of Employees 600 600 720 480 10 20 40 120 REQUIRED: A. What is the cost of the Information Systems Department allocated to Fruit using the direct method? B. Using the step-down method, what is the cost of the Personnel Department allocated to Fruit if the support department having the highest cost is allocated first? C. Write the equations needed to allocate the costs of each support department using the reciprocal method. D. Identify and discuss one problem with using a single rate allocation method to develop charges for the use of services.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

To address the problem lets tackle each part step by step A Direct Method Information Systems Depart... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Cost Accounting A Managerial Emphasis

Authors: Charles T. Horngren, Srikant M.Dater, George Foster, Madhav

13th Edition

8120335643, 136126634, 978-0136126638

More Books

Students also viewed these Accounting questions

Question

please dont use chat gpt or other AI 3 5 . HAZOP ( )

Answered: 1 week ago