1. Iota Tech Solutions

Scenario: Overhead Allocation for Service Departments

Service Department Details:

• IT Department:
  • Direct Costs: $200,000
  • Indirect Costs: $150,000
  • Allocation Base: Number of Employees
  • Employees: 75

• HR Department:
  • Direct Costs: $180,000
  • Indirect Costs: $120,000
  • Allocation Base: Total Salaries
  • Total Salaries: $700,000

Requirements:

• Allocate overhead costs to the IT and HR departments using their respective allocation bases. Prepare tables showing the allocation process and resulting costs.