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Hi, I just need part C please! See highlighted below. Thanks! excel BluStar Company has two service departments, Administration and Accounting, and two operating departments,
Hi, I just need part C please! See highlighted below. Thanks!
excel BluStar Company has two service departments, Administration and Accounting, and two operating departments, Domestic and International. Administration costs are allocated on the basis of employees, and Accounting costs are allocated on the basis of number of transactions. A summary of BluStar operations follows. Employees Transactions Department direct costs Administration Accounting Domestic International 25 45 180 25,000 - 20,000 80,000 $360,000 $144,000 $936,000 $3,600,000 Required a. Allocate the cost of the service departments to the operating departments using the direct method. b. Allocate the cost of the service departments to the operating departments using the step method. Start with Administration c. Allocate the cost of the service departments to the operating departments using the reciprocal method. d. Comment on the results. Part c. Reciprocal Method The equations set up: S1 = Administration: S2 = Accounting S1 = 360,000 + 20% S2 S2 = 144,000 + 10% S1 Substitute Accounting costs into the equation for Administration and solve in the shaded area below. Round the final answer to the nearest dollar. S2 = 144,000 + 10 (360,000 + 2 S2) S2 = 144,000 + 36,000 + 02 S2 .98 S2 = 180,000 The computed cost to be allocated for Accounting is Substitute the computed total Administration costs into the equation for Accounting and solve as before. Round the final answer to the nearest dollar. S1 = 360,000 + (2 x 183,673) The computed cost to be allocated for Administration is: Administration Accounting Domestic International Costs Administration Accounting Total Correct CorrectStep by Step Solution
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