Question
Mackenzie Mining has two operating divisions, Northern and Southern, that share the common costs of the companys human resources (HR) department. The annual costs of
Mackenzie Mining has two operating divisions, Northern and Southern, that share the common costs of the companys human resources (HR) department. The annual costs of the HR department total $29,000,000 a year. You have the following selected information about the two divisions:
| Number of Employees | Wage and Salary Expense ($000) | |
|---|---|---|
| Northern | 3,135 | $ 266,600 |
| Southern | 2,565 | 163,400 |
Required:
What is the HR cost that is charged to each division if the number of employees is used as the allocation basis?
What is the HR cost that is charged to each division if the wage and salary expense total is used as the allocation basis?
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Modern Auditing
Authors: Walter Gerry Kell, William C. Boynton, Richard E. Ziegler
5th Edition
0471542830, 9780471542834
