Exam 20: Service Department Allocations

Deardurff Legal Services, LLC, uses the step-down method to allocate service department costs to operating departments. The firm has two service departments, Personnel and Information Technology (IT), and two operating departments, Family Law and Corporate Law. Data concerning those departments follow: Personnel costs are allocated first on the basis of employees and IT costs are allocated second on the basis of PCs. -The total Corporate Law Department cost after allocations is closest to:

Poteete,Inc. ,allocates service department costs to operating departments using the step-down method.The company has two service departments,Administration and Physical Plant,and two operating departments,Assembly and Testing.Data concerning those departments follow: Administration Department costs are allocated first on the basis of employee time and Physical Plant Department costs are allocated second on the basis of space occupied.The total Testing Department cost after allocations is closest to:

Gatlin Company has several service departments that provide services for each other as well as for operating departments within the company.The method that would be least accurate in allocating the company's service department costs would be:

The Grand Company has budgeted departmental costs and operating activity in its four departments for the coming year as follows: The company does not distinguish between fixed and variable service department costs. Custodial costs are allocated on the basis of square feet occupied. Repair costs are allocated on the basis of the number of repair requests. -Assume Grand uses the direct allocation method.After all allocations,how much of the company's total overhead cost will be charged to the Production Department for the coming year?

Reddin Corporation has two service departments, Administrative and Facilities, and two operating departments, Assembly and Customer Solutions. The company uses the direct method to allocate service department costs to operating departments. Administrative costs are allocated on the basis of employee hours and Facilities costs are allocated on the basis of space occupied. -The total Customer Solutions Department cost after the allocations of service department costs is closest to:

The direct allocation method ignores the cost of interdepartmental services provided among service departments and allocates all costs directly to operating departments.

Hidden Corporation uses the direct method to allocate service department costs to operating departments.The company has two service departments,Administrative and Facilities,and two operating departments,Assembly and Wholesaling. Administrative costs are allocated on the basis of employee hours and Facilities costs are allocated on the basis of space occupied.The total Wholesaling Department cost after the allocations of service department costs is closest to:

Reddin Corporation has two service departments, Administrative and Facilities, and two operating departments, Assembly and Customer Solutions. The company uses the direct method to allocate service department costs to operating departments. Administrative costs are allocated on the basis of employee hours and Facilities costs are allocated on the basis of space occupied. -The total amount of Administrative Department cost allocated to the Assembly Department is closest to:

President Clinic has two service departments, Administrative and Support, and two operating departments, Adult Medicine and Pediatrics. The clinic uses the direct method to allocate service department costs to operating departments. Administrative Department costs are allocated on the basis of employee hours and Support Department costs are allocated on the basis of space occupied in square feet. -The total amount of Information Technology Department cost allocated to the two operating departments is closest to:

Konosh Medical Clinic has two service departments,Building Services and Energy,and three operating departments,Pediatrics,Geriatrics,and Surgery.Konosh allocates the cost of Building Services on square footage and Energy on patient days.No distinction is made between variable and fixed costs.Budgeted operating data for last year follow: Required: a.Prepare a schedule to allocate service department costs to operating departments by the direct method.(Round all dollar amounts to the nearest whole dollar. ) b.Prepare a schedule to allocate service department costs to operating departments by the step-down method,allocating Building Services first.(Round all dollar amounts to the nearest whole dollar. )

The Grand Company has budgeted departmental costs and operating activity in its four departments for the coming year as follows: The company does not distinguish between fixed and variable service department costs. Custodial costs are allocated on the basis of square feet occupied. Repair costs are allocated on the basis of the number of repair requests. -Assume Grand uses the step-down allocation method with Custodial costs allocated first.After all allocations,how much of the company's total overhead cost will be charged to the company's Finishing Department for the coming year?

Deardurff Legal Services, LLC, uses the step-down method to allocate service department costs to operating departments. The firm has two service departments, Personnel and Information Technology (IT), and two operating departments, Family Law and Corporate Law. Data concerning those departments follow: Personnel costs are allocated first on the basis of employees and IT costs are allocated second on the basis of PCs. -In the first step of the allocation,the amount of Personnel Department cost allocated to the Family Law Department is closest to:

President Clinic has two service departments, Administrative and Support, and two operating departments, Adult Medicine and Pediatrics. The clinic uses the direct method to allocate service department costs to operating departments. Administrative Department costs are allocated on the basis of employee hours and Support Department costs are allocated on the basis of space occupied in square feet. -The total Pediatrics Department cost after the allocations of service department costs is closest to:

Under the direct method of allocating service department costs,reciprocal services provided among service departments are ignored.

Stazenski Children's Clinic allocates service department costs to operating departments using the step-down method.The clinic has two service departments,Administration and Information Technology (IT),and two operating departments,Prenatal and Pediatric.Data concerning those departments follow: Administration costs are allocated first on the basis of employees and IT costs are allocated second on the basis of PCs.The total Pediatric Department cost after allocations is closest to:

Brannigan Corporation uses the direct method to allocate service department costs to operating departments. The company has two service departments, Information Technology and Personnel, and two operating departments, Fabrication and Customization. Information Technology Department costs are allocated on the basis of computer workstations and Personnel Department costs are allocated on the basis of employees. -The total Fabrication Department cost after service department allocations is closest to:

The step-down method allocates more total cost to operating departments than does the direct method.

The Uinta Company has two service departments and two operating departments. The following data are available from last year: The costs of service departments 1 and 2 are allocated on the basis of number of transactions and square feet occupied respectively. No distinction is made between fixed and variable costs. -Assume that Uinta allocates service department costs by the step-down method,starting with Department 1.The total overhead costs allocated from Department 2 to Department Y are:

Silton Surgical Hospital uses the direct method to allocate service department costs to operating departments.The hospital has two service departments,Telecommunications and Administration,and two operating departments,Surgery and Recovery. Telecommunications Department costs are allocated on the basis of the number of telecommunications ports in departments and Administration Department costs are allocated on the basis of employees.The total Surgery Department cost after service department allocations is closest to:

Balthazar Clinic uses the direct method to allocate service department costs to operating departments.The clinic has two service departments,Personnel and Support,and two operating departments,Prenatal and Pediatrics. Personnel Department costs are allocated on the basis of employee hours and Support Department costs are allocated on the basis of space occupied in square feet.The total Pediatrics Department cost after the allocations of service department costs is closest to: