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I need help with part 2 & 3. Please show all work. Support-Department Cost Allocation Goldfarb's Book and Music Store has two service departments, Warehouse
I need help with part 2 & 3. Please show all work.
Support-Department Cost Allocation 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 $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: Support Departments Production Departments Warehouse Data Center Music Books Department Department Budgeted costs $350,000 $100,000 $112,500 $135,000 Budgeted warehouse-hours NA 500 750 1,250 2UJO Number of computer hours 200 NA 800 1,000 BA 131250 music 1. Allocate the support departments' costs to the production departments using the direct method. 250 /8 x 350,00 - 131,250 o 3507 750+1252 bors 1250 18 x 350,000 = 218,750 750+ 1250 112500 2881941 800 100,OVO = 0.44 2 1 / 2 X 100,000 = 44444 gootiooo 100 3.0.564 & X100,000 = 55556. sort 1000 2. Rank the support departments based on the percentage of their services provided to the other support departments. Using this ranking to allocate the support departments' costs based on the step-down method. 3. Allocate the support departments' costs to the production departments using the linear equations reciprocal method. 2Step by Step Solution
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