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Goldfarb's Book and Music Store has two service departments, Warehouse and Data Center. Warehouse Department costs of 350,000 are allocated on the basis of budgeted
Goldfarb's Book and Music Store has two service departments, Warehouse and Data Center. Warehouse Department costs of 350,000 are allocated on the basis of budgeted warehouse-hours. Data center departments costs of $100,000 are allocated based on the number of computer log-on hours. The costs of operating departments Music and Books are 112,500 and 135,000 , respectively. Data on budgeted warehouse-hours and number of computer log-on hours are as follows: a) Allocate the support department's costs to the production departments using the direct method. b) Rank the support departments based on the percentage of their services provided to the support departments. USing this ranking to allocat the support departments' costs based on the step-down method. c) Allocated the support departments' costs to the production department using the linear equations reciprocal method
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