Why Choose Us?
0% AI Guarantee
Human-written only.
24/7 Support
Anytime, anywhere.
Plagiarism Free
100% Original.
Expert Tutors
Masters & PhDs.
100% Confidential
Your privacy matters.
On-Time Delivery
Never miss a deadline.
Siti's Book and Music Store has two service departments, Warehouse and Data Center
Siti's Book and Music Store has two service departments, Warehouse and Data Center. Warehouse Department costs of RM70,000 are allocated on the basis of budgeted warehouse- hours. Data Center Department costs of RM200,000 are allocated based on the number of computer log-on hours. The costs of operating departments Music and Books are RM 142,500 and RM171,000, respectively. Data on budgeted warehouse-hours and number of computer log-on hours are as follows: Production Departments Support Departments Warehouse Data Center Music Department Department Books RM370,000 RM200,000 RM142,500 RM171,000 Budgeted costs Budgeted warehouse- hours NA 590 1000 1600 Number of computer hours 250 NA 860 1010 Using the step-down method, what amount of Data Center Department cost will be allocated to Department Music if the service department with the highest percentage of interdepartmental support service is allocated first? (Round intermediary calculations to three decimal places.)
Expert Solution
| Service Departments | Operating Deparments | |||||
| Warehouse Departments | Data Centre Departments | Music | Books | % of departmetal service | ||
| Cost | 3,70,000 | 2,00,000 | 1,42,500 | 1,71,000 | ||
| budgeted Warehous Hours | 0 | 590 | 1000 | 1600 | 590/(590+1000+1600) | 0.1850 |
| Nos od Computer Hours | 250 | 850 | 1010 | 250/(250+850+1010) | 0.1185 |
- as first allocation is to be made based on highest % of service provided to other department wahrehouse department cost will be first allocated....
-
Service Departments Operating Deparments Warehouse Departments Data Centre Departments Music Books cost 3,70,000 2,00,000 1,42,500 1,71,000 allocation of warehouse cost -3,70,000 68,433* 1,15,987* 1,85,580* - 2,68,433 2,58,487 3,56,580 allocation of data centre cost 0 -2,68,433 1,22,671** 1,45,762** total balance after allocation of supportive department cost - - 3,81,158 5,02,342
*
| proportion | proportion | cost to be allocated' | allocation |
| 590/(590+1000+1600) | 0.184953 | $ 3,70,000 | $ 68,433 |
| 1000/(590+1000+1600) | 0.3134796 | $ 3,70,000 | $ 1,15,987 |
| 1600/(590+1000+1600) | 0.5015674 | $ 3,70,000 | $ 1,85,580 |
**
| proportion | proportion | cost to be allocated' | allocation |
| 850/(850+1010) | 0.4570 | $ 2,68,433 | $ 1,22,671 |
| 1010/(850+1010) | 0.5430 | $ 2,68,433 | $ 1,45,762 |
Hence answer to the question is amt of data centre cost allocated to musci department is 122,671.00
Archived Solution
You have full access to this solution. To save a copy with all formatting and attachments, use the button below.
For ready-to-submit work, please order a fresh solution below.





