cost accounting 2

Broadway Department Store has two support departments (Payroll and IT) and three operating departments (Shoes, Automotive, and Clothing). The support departments provide services to the operating departments, as well as to each other. Payroll Department costs are allocated based on the number of employees, while IT costs are allocated based on minutes of processing time. An analysis of the work done by the service departments in a recent month follows: Payroll IT Shoes Automotive Clothing Actual Total Costs $131,400 $68,400 Number of Employees 100 200 400 300 Processing Time 150 350 300 200 REQUIRED: Allocate the costs of the two service departments to the three operating departments using these methods (round to the nearest dollar and show the total support costs charged to each operating department): 1. Direct Method 2. Step-Down Method, with Payroll ranked as the first support department 3. Reciprocal Method