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The following information will apply to all questions in this quiz. Berle Company has two support departments, Information Services, allocated on the basis of service
The following information will apply to all questions in this quiz. Berle Company has two support departments, Information Services, allocated on the basis of service hours provided, and Physical Plant, allocated on the basis of service calls placed. SUPPORT DEPARTMENTS Information Services Physical Plant I Budgeted Costs $ 120,000 $ 50,000 Information Service hours 50 Physical Plant service calls 12 Allocate the support department costs shown above to production departments Pencil and Pen using the direct method. SUPPORT DEPARTMENTS PRO Peno Information Services Physical Plant Dep Budgeted Costs $ 120,000 $ 50,000 $ 8 Information Service hours Physical Plant service calls Total costs What are the formulas Berle will use in applying the reciprocal method to allocate service department costs to production departments? Information Services = $120,000 + 1/10 Physical Plant; Physical Plant = $50,000 + 1/5 Information Services Information Services = $120,000 + 1/5 Physical Plant; Physical Plant =$ 50,000 + 1/10 Information Services Information Services = $120,000 + (1/3 * $80,000) Physical Plant = $50,000 + (2/3 * $120,000) Information Services = $120,000 + (1/5 *$50,000) ; Physical Plant = $5 100 + (1/10 * $120,000)
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