Comprehensive support department allocations

Management at C$.$ Pier Press has decided to allocate costs of the paper's two support departments $($administration and human resources$)$ to the two revenue$-$generating departments $($advertising and circulation$).$ Administration costs are to be allocated on the basis of dollars of assets employed; human resources costs are to be allocated on the basis of number of employees. The following costs and allocation bases are available:

$\backslash$table$[[$Department$,$Direct Costs,Number of Employees,Assets Employed$],[$Administration$,$$$390,750,5,$$$193,550$

Chapter $13$ Homework

virect and step metnoas

Salado Inc. provides cleaning services through its Residential and Commercial divisions. Support services of the company are provided by Personnel and Administration areas. Costs of these two areas are allocated to the revenue producing departments. Personnel costs are allocated using number of employees; administration costs are allocated using direct department costs. The following annual budgeted information $($presented in a benefits$-$provided ranking$)$ is available:

$\backslash$table$[[,$Personnel,Administration,Residential,Commercial,$],[$Direct costs,$$140,000,$$$180,000,$$$480,000,$$$800,000,],[$Number of employees,$12,,30,72,48],[$Direct labor hours,,,$60,000,90,000,],[$Square feet cleaned,,,$450,000,570,000,]]$

a$.$ Using the direct method, allocate the costs of Personnel and Administration to the Residential and Commercial divisions.

Note: Do not round proportions in your calculations; round your final answer to the nearest whole dollar.

$\backslash$table$[[$Total support costs allocated to Residential $=$$$,0$