Question
Interdepartment Services: Step Method O'Brian's Department Stores allocates the costs of the Personnel and Payroll departments to three retail sales departments, Housewares, Clothing, and Furniture.
Interdepartment Services: Step Method O'Brian's Department Stores allocates the costs of the Personnel and Payroll departments to three retail sales departments, Housewares, Clothing, and Furniture. In addition to providing services to the operating departments, Personnel and Payroll provide services to each other. O'Brian's allocates Personnel Department costs on the basis of the number of employees and Payroll Department costs on the basis of gross payroll. Cost and allocation information for June is as follows: Personnel Payroll Housewares Clothing Furniture Direct department cost $6,100 $3,900 $12,800 $20,000 $16,050 Number of employees 4 2 9 14 4 Gross payroll $6,100 $3,300 $10,900 $16,900 $8,300
) Prepare a schedule showing Personnel Department and Payroll Department cost allocations to the operating departments, assuming O'Brian's uses the step method. For each department below, enter the total costs calculated from your schedule. Do not round until your final answers. Round answers to the nearest dollar.
Service Departments
Payroll
Personnel
Housewares
Producing Departments
Clothing
Furniture
Total costs
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