2) Broadway Department Store allocates the personnel and payroll department costs to the sales departments of Shoes, Automotive, and Clothing. Human resources (personnel) and payroll also provide services to each other. Personnel costs are allocated by number of employees and payroll costs are allocated by gross payroll. Costs and other information for January were as follows:
Personnel
Payroll
Shoes
Automotive
Clothing
Current Costs
$ 13,800
$ 6,400
$ 24,400
$ 40,000
$ 31,500
Gross Payroll
$ 3,000
$ 1,500
$ 5,600
$ 8,700
$ 4,050
Number of Employees
5
3
8
15
4
Required:
Prepare a schedule that includes the total cost of operating the sales departments for January. Allocate service costs using the step-down method with the sequence of allocation based on highest percentage support concept.
2) Broadway Department Store allocates the personnel and payroll department costs to the sales departments of Shoes, Automotive, and Clothing. Human resources (personnel) and payroll also provide services to each other. Personnel costs are allocated by number of employees and payroll costs are allocated by gross payroll. Costs and other information for January were as follows:
Personnel | Payroll | Shoes | Automotive | Clothing | |||||
Current Costs | $ 13,800 | $ 6,400 | $ 24,400 | $ 40,000 | $ 31,500 | ||||
Gross Payroll | $ 3,000 | $ 1,500 | $ 5,600 | $ 8,700 | $ 4,050 | ||||
Number of Employees | 5 | 3 | 8 | 15 | 4 | ||||
Required:
Prepare a schedule that includes the total cost of operating the sales departments for January. Allocate service costs using the step-down method with the sequence of allocation based on highest percentage support concept.
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