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Serga [27]
3 years ago
9

Interdepartment Services: Step Method

Business
1 answer:
Stells [14]3 years ago
3 0

Answer:

O'Brian's Department Stores

a) Determination of the percentage of total personnel department services that was provided to the Payroll department

Since allocation of the personnel department services is based on the number of employees, we can use this to calculate the percentage.  The personnel employees are not included in this calculation.

= 4/32 x 100 = 12.5%

b) Percentage of total payroll department services provided to the personnel department.  Since the basis is the gross payroll, we can use this to calculate the percentage.  The gross payroll of the Payroll department is not included in the calculation.

= $6,000/$42,100 x 100 = 14.3%

c)                          Personnel  Payroll  House-     Clothing   Furniture    Total

                                                         Ware

Direct department

  cost               $ 7,800  $ 3,200    $ 12,200   $ 20,000  $ 16,750  $59,950

Number of

  employees       5              4                8               16             4             37

Gross payroll $ 6,000  $ 3,300    $ 10,600     $ 17,400    $ 8,100   $45,400

Total cost      $13,800   $6,500    $22,800     $37,400  $24,850  $105,350

Allocation of service departments costs, using the step method:

Personnel      -13,800      1,725          3,450         6,900       1,725       13,800

Payroll              0           -8,225           2,415         3,965        1,845       8,225

Total allocated 0               0          $28,665    $48,265   $28,420 $105,350

Explanation:

a) Data:

                        Personnel  Payroll  House-     Clothing   Furniture    Total

                                                         Ware

Direct department

  cost               $ 7,800  $ 3,200    $ 12,200   $ 20,000  $ 16,750  $59,950

Number of

  employees       5              4                8               16             4             37

Gross payroll $ 6,000  $ 3,300    $ 10,600     $ 17,400    $ 8,100   $45,400

b) Cost allocation & Calculations:

Personnel (based on the number of employees)

Rate = $13,800/32 = $431.25 per employee

Payroll (based on gross payroll)

Rate = Payroll cost = Payroll cost divided by the total gross payroll in the other departments, excluding personnel and payroll departments

= $8,225/$36,100 = $0.2278 per gross payroll

c) Allocation of service departments' costs is a method of apportioning costs incurred by service departments to the production departments in order to include all the costs in the product costs.  Three methods exist for allocating service departments' costs to the production departments.  The first, which is the simplest, is the direct method.  With this method, the costs of service departments are allocated directly to each production department based on the consumption of the service department's services.  They are not allocated to other service departments.

The second method is the step method.  Here, the costs of one service department with the highest cost are allocated to all other departments first, including production and other service departments following a step.  The costs of the next service department with the highest costs are allocated to the remaining departments.  This step is continued until all the service departments' costs have been allocated.  Once the costs of a service department have been completely allocated, that department would not be allocated any other cost.

The Reciprocal method, which is the last method, is the most accurate and complicated method.  This method first establishes the relationship among the service departments in equation form and uses the established equations to allocate the costs of service departments.  We may not discuss it further than this.

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Assume that securitization combined with borrowing and irrational exuberance in Hyperville have driven up the value of existing
Mashcka [7]

Answer:

The financial securities would decline by $106.7

Explanation:

Given

Financial securities at a geometric rate= $128

Underlying Security Asset = $14

Decreased value of the underlying asset = $6

When there's a reduction of $6 in the underlying asset price, this means the securities value will also get a reduction by a ratio of 6.

Because of this, we'll only consider the financial securities because it increases at a geometric progression unlike underlying assets that increases by arithmetic progression.

First, the value of financial securities needs to be calculated using the following formula;.

Value of Financial Securities = Financial securities at a geometric rate ÷

Decreased value of the underlying asset

Value of Financial Securities = $128 ÷ 6

Value of Financial Securities = $21.3

Tthe decline value of the financial securities is calculated as follows:

Decline Value = Financial securities at a geometric rate - Value of Financial Securities

Decline Value = $128 - $21.3

Decline Value = $106.7

Hence, the financial securities would decline by $106.7

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Burger Prince buys top-grade ground beef for $1.00 per pound. A large sign over the entrance guarantees that the meat is fresh d
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Answer:

The optimal order quantity is 316 pounds

Explanation:

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Cu = ($0.60 - $0.50)*4 = $0.40

Co = $1 - $0.80 = $0.20

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= 0.6667

So, Z Value at above service level = 0.430727

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Optimal Order quantity= Mean + Z Value × Std Deviation

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7 0
2 years ago
Vroom-Vroom manufactures miniature cars and has determined that its total manufacturing cost of $1,500,000 is a mixture of unit-
abruzzese [7]

Answer:

$784,434 will be allocated to the Retail division

Explanation:

See attached file

8 0
2 years ago
The focus of strategic management is​ ______. A. the integration of all the functional areas of the business to achieve its orga
IceJOKER [234]

Answer:

A. the integration of all the functional areas of the business to achieve its organizational objectives

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