Please answer ALL requirements.
E15-22 (final answer) 3 Question Help 0 Vision Books, an online book retailer, has two operating departmentscorporate sales and consumer salesand two support departmentshuman resources and information systems. Each sales department conducts merchandising and marketing operations independently. Vision Books uses number of employees to allocate human resources costs and processing time to allocate information systems costs. The controller of Vision Books reads a widely used textbook that states that "the reciprocal method is conceptually the most defensible." He seeks your assistance. The following data are available for September 2013: E (Click the icon to view the data.) (Click the icon to view the direct allocation data.) (Click the icon to view the step-down allocation data.) Requirements 1. Describe the key features of the reciprocal method. 2. Allocate the support departments' costs (human resources and information systems) to the two operating departments using the reciprocal method. 3. In the case presented in this exercise, which method (direct, step-down, or reciprocal) would you recommend? Why? Requirement 1. Describe the key features of the reciprocal method. Interdepartmental relationships The reciprocal allocation method explicitly includes the mutual services provided fully incorporated into the support department cost allocations Click to select your answer(s) and then click Check Answer. 3 parts Clear All remaining Check Answer i Data Table Support Departments Human Information Resources Systems Operating Departments Corporate Consumer Sales Sales $ 80,000 $ 229,000 $ 960,000 $ 495,000 Budgeted costs incurred before any interdepartment cost allocations Support work supplied by human resources department Budgeted number of employees Support work supplied by information systems department Budgeted processing time (in minutes) - 20 56 24 400 2,520 1,080 Print Print Done Done i Direct allocation data $ Costs incurred Allocation of HR costs Allocation of Info. Systems costs Total budgeted costs of operating departments Support Departments Operating Departments HR Info. Systems Corporate Consumer Total 80,000 $ 229,000 $ 960,000 $ 495,000 $ 1,764,000 (80,000) 56,000 24,000 (229,000) 160,300 6 8,700 0 $ 1,176,300 $ 587,700 $ 1,764,000 Print Done Step-down allocation data - X 44,800 Support Departments Operating Departments HR Info. Systems Corporate Consumer Total Costs incurred $ 80,000 $ 229,000 $ 960,000 $ 495,000 $ 1,764,000 Allocation of HR costs (80,000) 16,000 19,200 $ 0 245,000 Allocation of Info. Systems costs (245,000) 171,500 73,500 Total budgeted costs of operating departments 0 $ 1,176,300 $ 587,700 $ 1,764,000 *Proportions for services provided to other support departments: human resources (HR), 0.20000; information sytems (IS), 0.10000 Print Done E15-22 (final answer) 3 Question Help 0 Vision Books, an online book retailer, has two operating departmentscorporate sales and consumer salesand two support departmentshuman resources and information systems. Each sales department conducts merchandising and marketing operations independently. Vision Books uses number of employees to allocate human resources costs and processing time to allocate information systems costs. The controller of Vision Books reads a widely used textbook that states that "the reciprocal method is conceptually the most defensible." He seeks your assistance. The following data are available for September 2013: E (Click the icon to view the data.) (Click the icon to view the direct allocation data.) (Click the icon to view the step-down allocation data.) Requirements 1. Describe the key features of the reciprocal method. 2. Allocate the support departments' costs (human resources and information systems) to the two operating departments using the reciprocal method. 3. In the case presented in this exercise, which method (direct, step-down, or reciprocal) would you recommend? Why? Requirement 1. Describe the key features of the reciprocal method. Interdepartmental relationships The reciprocal allocation method explicitly includes the mutual services provided fully incorporated into the support department cost allocations Click to select your answer(s) and then click Check Answer. 3 parts Clear All remaining Check Answer i Data Table Support Departments Human Information Resources Systems Operating Departments Corporate Consumer Sales Sales $ 80,000 $ 229,000 $ 960,000 $ 495,000 Budgeted costs incurred before any interdepartment cost allocations Support work supplied by human resources department Budgeted number of employees Support work supplied by information systems department Budgeted processing time (in minutes) - 20 56 24 400 2,520 1,080 Print Print Done Done i Direct allocation data $ Costs incurred Allocation of HR costs Allocation of Info. Systems costs Total budgeted costs of operating departments Support Departments Operating Departments HR Info. Systems Corporate Consumer Total 80,000 $ 229,000 $ 960,000 $ 495,000 $ 1,764,000 (80,000) 56,000 24,000 (229,000) 160,300 6 8,700 0 $ 1,176,300 $ 587,700 $ 1,764,000 Print Done Step-down allocation data - X 44,800 Support Departments Operating Departments HR Info. Systems Corporate Consumer Total Costs incurred $ 80,000 $ 229,000 $ 960,000 $ 495,000 $ 1,764,000 Allocation of HR costs (80,000) 16,000 19,200 $ 0 245,000 Allocation of Info. Systems costs (245,000) 171,500 73,500 Total budgeted costs of operating departments 0 $ 1,176,300 $ 587,700 $ 1,764,000 *Proportions for services provided to other support departments: human resources (HR), 0.20000; information sytems (IS), 0.10000 Print Done
