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Question 1 Alkatras Ltd., a drone manufacturer, has two operating departments manufacturing unit and distribution centerand two support departmentshuman resources and information systems. The operations
Question 1
Alkatras Ltd., a drone manufacturer, has two operating departments manufacturing unit and distribution centerand two support departmentshuman resources and information systems. The operations of the manufacturing and distribution center are performed independently. Alkatras uses number of employees to allocate human resources costs and processing time to allocate information systems costs. The following data are available for December 2022:
SUPPORT DEPARTMENTS | OPERATING DEPARTMENTS | |||
Human Resources | Information Systems | Manufacturing unit | Distribution center | |
Budgeted costs incurred before any interdepartmental cost allocations | $92,500 | $334,600 | $898,970 | $587,420 |
Support work supplied by human resources department | ||||
Budgeted number of employees | 18 | 51 | 32 | |
Support work supplied by information systems department | ||||
Budgeted processing time (in minutes) | 405 | 1,620 | 1,500 |
- Allocate the support departments' costs to the operating departments using the direct method.
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