Knowee
Questions
Features
Study Tools

Lot Co has a Maintenance Department and a HR Department that provide services to three Sales Departments. The Maintenance Department cost is allocated based on space and the HR Department cost is allocated on employees. The following information is available.     Maintenance Sales Sales Sales  HR Dep't Dep't Dep't #1 Dep't #2 Dep't #3Budget $45,000 $30,000      Space (Sqm) 4,000 1,000 20,000 30,000 50,000# of Employees 5 10 15 45 30 Using the step-down method, calculate the amount of HR Department cost allocated directly to Sales Department #3, if the HR Department is allocated first.

Question

Lot Co has a Maintenance Department and a HR Department that provide services to three Sales Departments. The Maintenance Department cost is allocated based on space and the HR Department cost is allocated on employees. The following information is available.     Maintenance Sales Sales Sales  HR Dep't Dep't Dep't #1 Dep't #2 Dep't #3Budget 45,00045,000 30,000      Space (Sqm) 4,000 1,000 20,000 30,000 50,000# of Employees 5 10 15 45 30 Using the step-down method, calculate the amount of HR Department cost allocated directly to Sales Department #3, if the HR Department is allocated first.

...expand
🧐 Not the exact question you are looking for?Go ask a question

Solution

To calculate the amount of HR Department cost allocated directly to Sales Department #3 using the step-down method, we first need to determine the total number of employees and the proportion that Sales Department #3 represents.

  1. First, calculate the total number of employees. In this case, it's 5 (HR) + 10 (Maintenance) + 15 (Sales #1) + 45 (Sales #2) + 30 (Sales #3) = 105 employees.

  2. Next, calculate the proportion of employees in Sales Department #3. This is done by dividing the number of employees in Sales Department #3 by the total number of employees. So, 30 / 105 = 0.2857, or 28.57%.

  3. Finally, multiply the HR Department cost by the proportion of employees in Sales Department #3 to find the amount of HR Department cost allocated directly to Sales Department #3. So, 30,0000.2857=30,000 * 0.2857 = 8,571.

Therefore, the amount of HR Department cost allocated directly to Sales Department #3 is $8,571.

This problem has been solved

Similar Questions

Lot Co has a Maintenance Department and a HR Department that provide services to three Sales Departments. The Maintenance Department cost is allocated based on space and the HR Department cost is allocated on employees. The following information is available.     Maintenance Sales Sales Sales  HR Dep't Dep't Dep't #1 Dep't #2 Dep't #3Budget $45,000 $30,000      Space (Sqm) 4,000 1,000 20,000 30,000 50,000# of Employees 5 10 15 45 30 Using the step-down method, calculate the amount of HR Department cost allocated directly to Sales Department #3, if the HR Department is allocated first.

Bred Ltd has two support departments (Cleaning and Information Technology (IT)and two operating departments (Assembly and Finishing). The table below showsthe resource provision by the two support departments to other departments. Thetotal budgeted departmental cost for the Cleaning department is S500,000 and forthe IT department, S200,000. The cost allocation basis for the Cleaningdepartment is floor space (square meters), whereas the allocation basis for the lTdepartment is number of employees. Resourceprovision Support departments Cleaning IT S500000 S200000 Operating departments Assembly Finishing Cleaning square 400 600 1000 900 metres) T (no. of employees 22 2 6 10 Using the step-down method of support cost allocation, what is the amount of ITcost allocated to the Assembly department?

The following is a partially completed lower section of a departmental expense allocation spreadsheet for Brickland. It reports the total amounts of direct and indirect expenses for the four departments. Purchasing department expenses are allocated to the operating departments on the basis of purchase orders. Maintenance department expenses are allocated based on square footage. Compute the amount of Maintenance department expense to be allocated to Assembly. Department Direct Expenses Number Purchase Orders Square FeetPurchasing $ 32,000    Maintenance 18,000    Fabrication 96,000 16 3,300Assembly 62,000 4

The following is a partially completed lower section of a departmental expense allocation spreadsheet for Brickland. It reports the total amounts of direct and indirect expenses for the four departments. Purchasing department expenses are allocated to the operating departments on the basis of purchase orders. Maintenance department expenses are allocated based on square footage. Department Direct Expenses Number Purchase Orders Square FeetPurchasing $ 40,000    Maintenance 22,800    Fabrication 104,000 14 3,700Assembly 70,000 6 2,300 Compute the amount of Purchasing department expense to be allocated to Assembly

The following is a partially completed lower section of a departmental expense allocation spreadsheet for Brickland. It reports the total amounts of direct and indirect expenses for the four departments. Purchasing department expenses are allocated to the operating departments on the basis of purchase orders. Maintenance department expenses are allocated based on square footage. Compute the amount of Maintenance department expense to be allocated to Assembly. Department Direct Expenses Number Purchase Orders Square FeetPurchasing $ 32,000    Maintenance 18,000    Fabrication 96,000 16 3,300Assembly 62,000 4 2,700Multiple Choice$9,000.$9,900.$6,400.$25,600.$8,100.

1/1

Upgrade your grade with Knowee

Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.