Question
Chancellor Company is divided into four departments. Departments A and B are service departments and Departments 1 and 2 are operating (production) departments. The services
Chancellor Company is divided into four departments. Departments A and B are service departments and Departments 1 and 2 are operating (production) departments. The services of the two service departments are used by the other departments as follows:
| Dept. A | Dept. B | Dept. 1 | Dept. 2 | |
| Services of: | ||||
| Department A | 50% | 20% | 30% | |
| Department B | 40% | 60% | ||
| Direct costs incurred by each department | $60,000 | $50,000 | $70,000 | $80,000 |
Complete the following table:
| Allocation of Expenses to Departments | ||||
| Department A | Department B | Department 1 | Department 2 | |
| Total direct | ||||
| Department expenses | $60,000 | $50,000 | $70,000 | $80,000 |
| Service department expenses | ||||
| Department A | ||||
| Subtotal | ||||
| Department B | ||||
| Total | ||||
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The Outsourcing Dilemma Whats Best For Internal Auditing
Authors: Larry E. Rittenberg, Institute Of Internal Auditors Research Foundation, Lee A. Campbell
1st Edition
0894133845, 978-0894133848
