Question
Cost information for Lake County Library is as follows. Support Operating Direct Costs Maintenance Administration Books Other Media Total Salaries $20000 $40000 $50000 $70000 $180000
Cost information for Lake County Library is as follows.
Support Operating
Direct Costs Maintenance Administration Books Other Media Total
Salaries $20000 $40000 $50000 $70000 $180000
Supplies $5000 $5000 $15000 $25000 $50000
Allocation Base Volumes
Square Feet 500 500 1200 300 2500
Employees 1 1 2 1 5
In addition to directly traceable costs, the library incurred $24,000 for a building lease.
Required
(a)Allocate to departments any costs that have not been traced, and then calculate total costs assigned to each department.
(b)Allocate the support department costs to the operating departments using the direct method.
(c)Allocate the support department costs to the operating departments using the step-down method. Allocate first the costs for the support department having the largest direct costs.
(d)Allocate the support department costs to the operating departments using the reciprocal method. Use either simultaneous equations or Excel Solver.
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