The Cost of Operating the Human Resources Department of Goodtime

Essay

The cost of operating the Human Resources department of Goodtime Foods Inc.includes $216,000 of fixed costs and $57,600 of variable costs.The department normally budgets 7,200 human resource hours a year.Two departments receive human resource support, Production and Sales.Production is budgeted at 5,040 hours a year, while Sales is budgeted the remainder.Required:
a.In July, Production used 600 human resource hours and Sales used 200 hours.How much did each department receive in human resource costs assuming a single-rate is used based on budgeted hours?
b.In August, Production used 500 human resource hours and Sales used 200 hours.How much did each department receive in human resource costs assuming a dual-rate is used with budgeted usage for fixed costs and actual usage for variable costs?
c.Which method seems more appropriate in this case? Explain.