Question
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
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 | $ 7,800 | $ 3,200 | $ 12,200 | $ 20,000 | $ 16,750 |
Number of employees | 5 | 4 | 8 | 16 | 4 |
Gross payroll | $ 6,000 | $ 3,300 | $ 10,600 | $ 17,400 | $ 8,100 |
(a) Prepare a schedule showing Personnel Department and Payroll Department cost allocations to the operating departments, assuming O'Brian's uses the step method.
Do not round until your final answers. Round answers to the nearest dollar.
Service Departments | Producing Departments | ||||
---|---|---|---|---|---|
Payroll | Personnel | Housewares | Clothing | Furniture | |
Total costs |
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