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Cornerstones of Cost Management 2nd Edition by Don Hansen ,Maryanne Mowen
Edition 2ISBN: 978-1111824402Cornerstones of Cost Management 2nd Edition by Don Hansen ,Maryanne Mowen
Edition 2ISBN: 978-1111824402 Exercise 50
Fixed and Variable Cost Allocation
Refer to the data in Exercise 7.18. When the capacity of the HR Department was originally established, the normal usage expected for each department was 20,000 direct labor hours. This usage is also the amount of activity planned for the two departments in Year 1 and Year 2.
Required:
1. Allocate the costs of the HR Department using the direct method and assuming that the purpose is product costing.
2. Allocate the costs of the HR Department using the direct method and assuming that the purpose is to evaluate performance.
Refer to the data in Exercise 7.18. When the capacity of the HR Department was originally established, the normal usage expected for each department was 20,000 direct labor hours. This usage is also the amount of activity planned for the two departments in Year 1 and Year 2.
Required:
1. Allocate the costs of the HR Department using the direct method and assuming that the purpose is product costing.
2. Allocate the costs of the HR Department using the direct method and assuming that the purpose is to evaluate performance.
Explanation
Verified
Verified
1.When the purpose of allocation of serv...
Cornerstones of Cost Management 2nd Edition by Don Hansen ,Maryanne Mowen
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