Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Please I need a correct and complete answer, because many times it has been incomplete answers. thank you 1 More Info independently. E books uses
Please I need a correct and complete answer, because many times it has been incomplete answers. thank you
1 More Info independently. E books uses number of employees to allocate human resources costs and processing time to allocate information systems costs. The controller of E -books reads a widely used textbook that states that "the reciprocal method is conceptually the most defensible." He seeks your assistance. Data Table Operating Departments Support Departments Human Information Corporate Consumer Sales Resources Systems Sales Budgeted costs incurred before any interdepartment cost allocations Support work supplied by human resources department $ 72,700 $ 234,400 998,270 489,860 Budgeted number of employees Support work supplied by information systems department 21 42 28 Budgeted processing time (in minutes) 1,920 1,600 320 i Direct allocation data Support Departments Operating Departments HR Info. Systems Corporate ConsumerTotal $72,700$234,400 $ 998,270 $489,860 $ 1,795,230 Costs incurred Allocation of HR costs Allocation of Info. Systems costs Total budgeted costs of operating departments (72,700) 43,620 29,080 234400 27 853 106,547 0 $ 1,169,743 $ 625,487 $ 1,795,230 0 $ Step-down allocation data Support Departments HR 72,700 $ (72,700) Operating Departments Total Info. Systems Corporate Consumer Costs incurred 234,400 S 998,270 $ 489,860 S 1,795,230 16,777 33,554 22,369 Allocation of HR costs 251,177 (251,177) 137,006 114,173 ation of Info. Systems costs Alloc Total budgeted costs of operating departments Proportions for services provided to other support departments: human resources (HR), 0.23077; information sytems (IS) 0 S 1,168,830 $ 626,402 $ 1,795,230 0.08333. E- books, an online book retailer, has two operating departments- corporate The following data are available for September 2017 sales and consumer sales and two support departments human resources andEEE (Click the icon to view the data.) information system:s (Click the icon to view the direct allocation data.) (Click the icon to view additional information.) (Click the icon to view the step-down allocation data.) Read the requirements. Requirement 1. Describe the key features of the reciprocal method. The reciprocal allocation method explicitly includes the mutual services provided fully incorporated into the support department cost allocations. V Interdepartmental relationships Requirement 2. Allocate the support departments' costs (human resources and i among all support departments ents using the reciprocal method. Before we can allocate the support departments' costs to the two operating depar support department. Then off-line solve for HR and IS (Information Systems), so t used: HR-human resources; IS information system.) to the Human Resource deparment to the Information Systems department ermine the linear equations for each ort departments' costs. (Abbreviations HR- IS- Now allocate the support departments' costs (human resources and information systems) to the two operating departments using the reciprocal method. (Round proportions to five decimal places, XXXXX, and your final answers to the nearest whole dollar. Use parentheses or a minus sign when decreasing departments by allocating costs. Enter a "O" for zero balances.) Support Deparments HR Info. SystemsCorporate Consumer Total Operating Departments Costs incurred Allocation of HR costs Allocation of Info. Systems costs Total budgeted costs of operating departments This time, use repeated iterations. (Round proportions to five decimal places, XXXXX, and your final answers to the nearest whole dollar. Use parentheses or a minus sign when decreasing departments by allocating costs. Enter a "O" for any zero balances. Note that rounding differences may occur in the totals after allocation.) Support Departments Operating Departments HR Reciprocal Method Budgeted overhead costs Info. Systems Corporate Consumer Total before interdepartment cost allocations First allocation of HR costs First allocation of Info. Systems costs Second allocation of HR costs Second allocation of Info. Systems costs Third allocation of HR costs Third allocation of Info. Systems costs Fourth allocation of HR costs Fourth allocation of Info. Systems costs Total budgeted overhead of operating departments Requirement 3. In the case presented in this exercise, which method (direct, step-down, or reciprocal) would you recommend? Why? Recommendation: The Why would you recommend this method? | because it is more accurate than the other two methods when there are mutual relationships among support departments. ( A. O B. O C. It ranks support departments in the order that the allocation is to proceed and partially recognizes the mutual services provided It fully incorporates interdepartmental relationships into the support departments cost allocation. It is easy to compute and understand, and being precise is not necessaryStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started