Question
In: Accounting
BluStar Company has two service departments, Administration and Accounting, and two operating departments, Domestic and International....
BluStar Company has two service departments, Administration and Accounting, and two operating departments, Domestic and International. Administration costs are allocated on the basis of employees, and Accounting costs are allocated on the basis of number of transactions. A summary of BluStar operations follows: Administration Accounting Domestic International Employees – 28 36 36 Transactions 38,000 – 20,000 80,000 Department direct costs $ 363,000 $ 141,000 $ 955,000 $ 3,750,000
Allocate the cost of the service departments to the operating departments using the reciprocal method. (Do not round intermediate calculations. Negative amounts should be indicated by a minus sign.)
Solutions
Expert Solution
| Please hit LIKE button if this helped. For any further explanation, please put your query in comment, will get back to you. | ||||||
| Reciperocal Mathod | To | |||||
| Admin | Accounting | Domestic | International | |||
| From | ||||||
| Department Cost | $ 363,000 | $ 141,000 | $ 955,000 | $ 3,750,000 | ||
| Administration | $ 1 | $-435,400 | $ 121,912 | $ 156,744 | $ 156,744 | |
| Accounting | in Accounting ratio | $ 72,400 | $ -263,296 | $ 38,159 | $ 152,737 | R/off |
| Total | $ -0 | $ -384 | $1,149,903 | $ 4,059,481 | ||
| Admin | Accounting | |||||
| Admin | $ 363,000 | 27.54% | ||||
| Accounting | $ 141,000 | 28.00% | ||||
| Dom | $ 955,000 | 36.00% | 14.49% | |||
| Int | $ 3,750,000 | 36.00% | 57.97% | |||
| Admin= | 363000+0.2754 of Accounting | Eq1 | ||||
| Accounting= | 141000+0.28 of Admin | Eq2 | ||||
| Substituting the value of Accounting in Eq1 | ||||||
| Admin= | 363000+0.2754(141000+0.28 of Admin) | |||||
| Admin= | 363000+38831+0.0771 of admin | $ 38,831.40 | 0.0771 | |||
| Admin-0.0771 Admin= | $ 401,831 | $ 401,831 | ||||
| 0.9229 Admin | $ 401,831 | 0.9229 | ||||
| Admin= | 401831/0.9229 | |||||
| Admin= | $ 435,400 | |||||
| Substituting the value of Admin in Eq 2 | ||||||
| Accounting= | 141000+0.28 of Admin | |||||
| Accounting= | 141000+(0.28*436773) | |||||
| Accounting= | $ 263,296 | |||||
ekkarill92 answered 2 years agoRelated Solutions
BluStar Company has two service departments, Administration and Accounting, and two operating departments, Domestic and International....
BluStar Company has two service departments, Administration and
Accounting, and two operating departments, Domestic and
International. Administration costs are allocated on the basis of
employees, and Accounting costs are allocated on the basis of
number of transactions. A summary of BluStar operations
follows.
Administration
Accounting
Domestic
International
Employees
–
21
46
33
Transactions
35,000
–
18,000
72,000
Department
direct costs
$
361,000
$
142,000
$
950,000
$
3,680,000
Required:
a. Allocate the cost of the service departments
to the operating...
BluStar Company has two service departments, Administration and Accounting, and two operating departments, Domestic and International....
BluStar Company has two service departments, Administration and
Accounting, and two operating departments, Domestic and
International. Administration costs are allocated on the basis of
employees, and Accounting costs are allocated on the basis of
number of transactions. A summary of BluStar operations
follows.
Administration
Accounting
Domestic
International
Employees
—
25
15
60
Transactions
50,000
—
10,000
40,000
Department direct costs
$
58,000
$
24,500
$
159,750
$
597,000
BluStar estimates that the cost structure in its operations is as
follows....
BluStar Company has two service departments, Administration and Accounting, and two operating departments, Domestic and International....
BluStar Company has two service departments, Administration and
Accounting, and two operating departments, Domestic and
International. Administration costs are allocated on the basis of
employees, and Accounting costs are allocated on the basis of
number of transactions. A summary of BluStar operations
follows.
Administration Accounting Domestic
International
Employees – 30 40 30
Transactions 36,000 – 19,000 76,000
Dept direct costs $ 359,000 $ 146,000 $ 930,000
$ 3,720,000
Required:c. Allocate the cost of...
BluStar Company has two service departments, Administration and Accounting, and two operating departments, Domestic and International....
BluStar Company has two service departments, Administration and
Accounting, and two operating departments, Domestic and
International. Administration costs are allocated on the basis of
employees, and Accounting costs are allocated on the basis of
number of transactions. A summary of BluStar operations
follows.
Administration
Accounting
Domestic
International
Employees
–
29
49
22
Transactions
36,000
–
19,000
76,000
Department direct costs
$
357,000
$
147,000
$
945,000
$
3,650,000
Required:
a. Allocate the cost of the service departments
to the operating...
BluStar Company has two service departments, Administration and Accounting, and two operating departments, Domestic and International....
BluStar Company has two service departments, Administration and
Accounting, and two operating departments, Domestic and
International. Administration costs are allocated on the basis of
employees, and Accounting costs are allocated on the basis of
number of transactions. A summary of BluStar operations
follows:
Administration
Accounting
Domestic
International
Employees
–
26
49
25
Transactions
30,000
–
23,000
92,000
Department direct costs
$
351,000
$
146,000
$
945,000
$
3,680,000
Required:
a. Allocate the cost of the service departments
to the operating...
BluStar Company has two service departments, Administration and Accounting, and two operating departments, Domestic and International....
BluStar Company has two service departments, Administration and
Accounting, and two operating departments, Domestic and
International. Administration costs are allocated on the basis of
employees, and Accounting costs are allocated on the basis of
number of transactions. A summary of BluStar operations
follows.
Administration
Accounting
Domestic
International
Employees
–
28
51
21
Transactions
32,000
–
19,000
76,000
Department direct costs
$
358,000
$
149,000
$
935,000
$
3,560,000
Required:
a. Allocate the cost of the service departments
to the operating...
BluStar Company has two service departments, Administration and Accounting, and two operating departments, Domestic and International....
BluStar Company has two service departments, Administration and
Accounting, and two operating departments, Domestic and
International. Administration costs are allocated on the basis of
employees, and Accounting costs are allocated on the basis of
number of transactions. A summary of BluStar operations
follows:
Administration
Accounting
Domestic
International
Employees
—
25
15
60
Transactions
50,000
—
10,000
40,000
Department direct costs
$
54,000
$
26,500
$
159,250
$
596,000
BluStar estimates that the cost structure in its operations is as
follows:...
BluStar Company has two service departments, Administration and Accounting, and two operating departments, Domestic and International....
BluStar Company has two service departments, Administration and
Accounting, and two operating departments, Domestic and
International. Administration costs are allocated on the basis of
employees, and Accounting costs are allocated on the basis of
number of transactions. A summary of BluStar operations
follows:
Administration
Accounting
Domestic
International
Employees
–
21
44
35
Transactions
34,000
–
19,000
76,000
Department direct costs
$
359,000
$
144,000
$
935,000
$
3,780,000
Required:
a. Allocate the cost of the service departments
to the operating...
BluStar Company has two service departments, Administration and Accounting, and two operating departments, Domestic and International....
BluStar Company has two service departments, Administration and
Accounting, and two operating departments, Domestic and
International. Administration costs are allocated on the basis of
employees, and Accounting costs are allocated on the basis of
number of transactions. A summary of BluStar operations
follows.
Administration
Accounting
Domestic
International
Employees
–
25
37
38
Transactions
39,000
–
19,000
76,000
Department direct costs
$
363,000
$
149,000
$
950,000
$
3,760,000
Required:
a. Allocate the cost of the service departments
to the operating...
Dunnes Stores has two service department, Advertising and Administration, and two operating departments, Hardware and Automotive....
Dunnes Stores has two service department, Advertising and
Administration, and two operating departments, Hardware and
Automotive. Sales, COGS, and direct expenses are given below.
Complete the following table, including allocation of $220,000 of
indirect costs. Indirect costs are allocated on the basis of square
footage:Advertising Department:750 square feet, Administration
Department:1,500 square feet, Hardware Department:3,000 square
feet, Automotive Department:9,750 square feet
Dunnes Stores
Revenues and Expenses
Y/E December 31, 2018
Service Departments
Operating Departments
Totals
Advertising
Admin
Hardware
Automotive
Sales
...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Describe how component-based development is used during the requirements gathering and definition within the Agile process...
- Your corporation is considering investing in a new product line. The annual revenues (sales) for the...
- HCJ Corporation is completing their cash budget for the following year. They are going to buy...
- Theories of Development: Compare and Contrast three of theories of development. Discuss their limitations and contributions....
- in java Write a program that convert a Fahrenheit to Celsius. For conversion, use as many...
- Suppose a bacterium had the opportunity to form a glycocalyx, a flagellum, a pilus, or a...
- You are an entrepreneur starting a biotechnology firm. If your research is successful, the technology can...
ADVERTISEMENT