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Perez Information Services, Inc., has two service departments: human resources and billing. Perez's operating departments, organized according to the special industry each department serves, are
Perez Information Services, Inc., has two service departments: human resources and billing. Perez's operating departments, organized according to the special industry each department serves, are health care, retail, and legal services. The billing department supports only the three operating departments, but the human resources department supports all operating departments and the billing department. Other relevant information follows. Number of employees Annual cost Annual revenue Human Resources 20 $900,000 Billing 50 $ 2,710,000 Health Care 200 $ 6,100,000 $10,000,000 Retail 150 $4,900,000 $5,700,000 Legal Services 100 $2,900,000 $4,300,000 * This is the operating cost before allocating service department costs. Required a. Allocate service department costs to operating departments, assuming that Perez adopts the step method. The company uses the number of employees as the base for allocating human resources department costs and department annual revenue as the base for allocating the billing department costs. b. Allocate service department costs to operating departments, assuming that Perez adopts the direct method. The company uses the number of employees as the base for allocating the human resources department costs and department annual revenue as the base for allocating the billing department costs. c. Compute the total allocated cost of service centers for each operating department using each allocation method. Complete this question by entering your answers in the tabs below. Reg A1 Reg A2 Reg B1 Req B2 Reg Ci Reg C2 Allocate service department costs to operating departments, assuming that Perez adopts the step method. The company uses the number of employees as the base for allocating human resources department costs. Allocated Cost Allocation Rate $ Weight of Base 50] = 2001 = 150] = $ 0 Department Billing Health Care Retail Legal Services Total 0 0 0 100 $ 0 Required a. Allocate service department costs to operating departments, assuming that Perez adopts the step method. The company uses the number of employees as the base for allocating human resources department costs and department annual revenue as the base for allocating the billing department costs. b. Allocate service department costs to operating departments, assuming that Perez adopts the direct method. The company uses the number of employees as the base for allocating the human resources department costs and department annual revenue as the base for allocating the billing department costs. c. Compute the total allocated cost of service centers for each operating department using each allocation method. Complete this question by entering your answers in the tabs below. Reg A1 Reg A2 Req B1 Req B2 Reg C1 Reg C2 Allocate service department costs to operating departments, assuming that Perez adopts the direct method. The company uses the number of employees as the base for allocating human resources department costs. Department Allocation Rate Weight of Base Allocated Cost X $ 0 Billing Health Care Retail Legal Services Total 0 0 0 a. Allocate service department costs to operating departments, assuming that Perez adopts the step method. The company uses the number of employees as the base for allocating human resources department costs and department annual revenue as the base for allocating the billing department costs. b. Allocate service department costs to operating departments, assuming that Perez adopts the direct method. The company uses the number of employees as the base for allocating the human resources department costs and department annual revenue as the base for allocating the billing department costs. c. Compute the total allocated cost of service centers for each operating department using each allocation method. Complete this question by entering your answers in the tabs below. Req A1 Reg A2 Req B1 Reg B2 Reg C1 Reg C2 Allocate service department costs to operating departments, assuming that Perez adopts the direct method. The company uses the department annual revenue as the base for allocating the billing department costs. (Round "Allocation rate" to 4 decimal places.) Allocation Rate Weight of Base = Allocated Cost $ 0 Department Health Care Retail Legal Services Total 0 0 $ 0 Required a. Allocate service department costs to operating departments, assuming that Perez adopts the step method. The company uses the number of employees as the base for allocating human resources department costs and department annual revenue as the base for allocating the billing department costs. b. Allocate service department costs to operating departments, assuming that Perez adopts the direct method. The company uses the number of employees as the base for allocating the human resources department costs and department annual revenue as the base for allocating the billing department costs. c. Compute the total allocated cost of service centers for each operating department using each allocation method. Complete this question by entering your answers in the tabs below. Reg A1 Reg A2 Reg B1 Req B2 Reg C1 Reg C2 Compute the total allocated cost of service centers for each operating department using step method. Human Resources Department Health Care Billing Total Allocated Cost $ 0 Retail = 0 0 Legal Services Total $ 0 Required a. Allocate service department costs to operating departments, assuming that Perez adopts the step method. The company uses the number of employees as the base for allocating human resources department costs and department annual revenue as the base for allocating the billing department costs. b. Allocate service department costs to operating departments, assuming that Perez adopts the direct method. The company uses the number of employees as the base for allocating the human resources department costs and department annual revenue as the base for allocating the billing department costs. c. Compute the total allocated cost of service centers for each operating department using each allocation method. Complete this question by entering your answers in the tabs below. Reg A1 Reg A2 Req B1 Reg B2 Reg C1 Reg C2 Compute the total allocated cost of service centers for each operating department using direct method. Department Human Resources Billing Total Allocated Cost $ 0 = Health Care Retail 0 0 Legal Services Total $ 0
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