Question
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 Department costs of $150,000 are allocated based on the number of computer log-on hours. The costs of operating departments Music and Books are $250,000 and $300,000, respectively. Data on budgeted warehouse-hours and number of computer log-on hours are as follows:
| Support Departments | Production Departments |
| ||
| Warehouse Department | Data Center Department | Music | Books | |
Budgeted costs | $350,000 | $150,000 | $125,000 | $150,000 | |
Percent of warehouse-hours | NA | 15% | 50% | 35% | |
Percent of of computer hours | 10% | NA | 40% | 50% | |
Allocate the Warehouse and Data Center costs to the production departments using the reciprocal method.
Show the total costs of the production departments.
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