Business, 18.06.2021 05:20 cgonzalez1371

Leander Mfg. has three support departments (human resources, administration, and maintenance) and two revenue-generating departments (assembly and finishing). The company uses the step method to allocate support department costs to operating departments. In October, human resources incurred $1,008,000 of costs, administration incurred $1,562,400, and maintenance incurred $476,000. Proportions of services provided to other departments for October follow. Human Resources Administration Maintenance Human resources 10% 5% Administration 10% 15 Maintenance 15 10 Assembly 40 50 45 Finishing 35 30 35 a. Assume that the departments are listed in a benefits-provided ranking. Note: Do not round proportions in your calculations; round your final answer to the nearest whole dollar. 1. What amount of cost should be assigned from human resources to each of the other departments

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Answer from: joellianamikhai3123

Leander Mfg.

Human resources cost assigned to other departments:

Administration 100,800 (10%)

Maintenance 151,200 (15%)

Assembly 403,200 (40%)

Finishing 352,800 (35%)

Total HR costs $1,008,000

Explanation:

a) Data and Calculations:

Human Resource Administration Maintenance

Direct costs incurred $1,008,000 $1,562,400 $476,000

Human resources 10% 5%

Administration 10% 15

Maintenance 15 10

Assembly 40 50 45

Finishing 35 30 35

Allocation of Costs:

Human Resource Administration Maintenance

Direct costs incurred $1,008,000 $1,562,400 $476,000

Human resources ($1,008,000) 100,800 151,200

Administration 100,800 (10%) ($1,663,200) 184,800

Maintenance 151,200 (15%) 184,800 (10%) ($812,000)

Assembly 403,200 (40%) 924,000 (50%) 456,750 (45%)

Finishing 352,800 (35%) 554,400 (30%) 355,250 (35%)

Human resources cost assigned to other departments:

Administration 100,800 (10%)

Maintenance 151,200 (15%)

Assembly 403,200 (40%)

Finishing 352,800 (35%)

Total HR costs $1,008,000

Administration costs assigned to other departments:

Maintenance 184,800 ($1,663,200 * 10/90)

Assembly 924,000 ($1,663,200 * 50/90)

Finishing 554,400 ($1,663,200 * 30/90)

Total administration costs $1,663,200

Maintenance costs assigned to other departments:

Assembly 456,750 ($812,000 * 45/80)

Finishing 355,250 ($812,000 * 35/80)

Total administration costs $812,000

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