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Peter's Boats and Oars Store has two service departments, Warehouse and Accounting. The Warehouse Department costs of $550,000 are allocated on the basis of budgeted
Peter's Boats and Oars Store has two service departments, Warehouse and Accounting. The Warehouse Department costs of $550,000 are allocated on the basis of budgeted warehouse hours Accounting Department costs of $450,000 are allocated based on the number of transactions in each department. The costs of the operating departments Boats and Oars are $250,000 and $150,000 respectively. Data on budgeted warehouse-hours and number of transactions are as follows Support Departments Accounting Department $450,000 Production Departments Warehouse Boats Oars Department $550,000 Budgeted costs Bud Number of transactions $250,000 $150,000 1,000 ted warehouse-hours NA 800 1,500 1,200 NA 800 1,000 Using the direct method calculate the total amount of Support Department costs allocated to Hammers and Saws departments a. (3 marks) Using the step down method calculate the amount of Support Department costs allocated to b. the Boats and Oars departments, if the service department with the highest percentage of (Round up two decimals) (3marks) interdepartmental support service is allocated first
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