Support Departments Operating Departments Information Eastern Western Engineering Technology Department Department Total Budgeted overhead costs before any interdepartment cost allocations Support work furnished: By Engineering Budgeted Engineering salaries Percentage By Information Technology Budgeted IT service hours Percentage $300,000 $250,000 $650,000 $920,000 $2,120,000 $60,000 $50,000 $90,000 $200,000 30% 25% 45% 100% 450 1,500 1,050 3,000 15% 50% 35% 100% 1. What are the total overhead costs of the operating departments (Eastern and Western) after the support-department costs of Engineering and Information Technology have been allocated using (a) the direct method, (b) the step-down method (allocate Engineering first), (c) the step-down method (allocate Information Technology first), and (d) the reciprocal method? 2. Which method would you recommend that Ballantine Corporation use to allocate service-department costs? Why? Required

Support Departments Operating Departments Information Eastern Western Engineering Technology Department Department Total Budgeted overhead costs before any interdepartment cost allocations Support work furnished: By Engineering Budgeted Engineering salaries Percentage By Information Technology Budgeted IT service hours Percentage $300,000 $250,000 $650,000 $920,000 $2,120,000 $60,000 $50,000 $90,000 $200,000 30% 25% 45% 100% 450 1,500 1,050 3,000 15% 50% 35% 100% 1. What are the total overhead costs of the operating departments (Eastern and Western) after the support-department costs of Engineering and Information Technology have been allocated using (a) the direct method, (b) the step-down method (allocate Engineering first), (c) the step-down method (allocate Information Technology first), and (d) the reciprocal method? 2. Which method would you recommend that Ballantine Corporation use to allocate service-department costs? Why? Required

Name: Support-department cost allocations; direct, step-down, and reciprocal
Uploaded: 2024-03-20T06:32:49.000Z
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Description: Support-department cost allocations; direct, step-down, and reciprocal methods. Ballantine Corporation has two operating departments: Eastern Department and Western Department. Each of the operating departments uses the services of the company’s two

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter10: Evaluating Decentralized Operations

Section: Chapter Questions

Problem 2BE: Support department allocations The centralized computer technology department of Hardy Company has...

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