Question

Gotham University offers only high-tech graduate-level programs. Gotham has two principal operating departments, Engineering and Computer Sciences, and two support departments, Facility and Technology Maintenance and Enrollment Services. The base used to allocate facility and technology maintenance is budgeted total maintenance hours. The base used to allocate enrollment services is number of credit hours for a department. The Facility and Technology Maintenance budget is $350,000, while the Enrollment Services budget is $950,000. The following chart summarizes budgeted amounts and allocation-base amounts used by each department:
Budget Engineering Computer Sciences F&T Maintenance Enrollment Service
F&T Maintenance hours $350,000 2,000 5,000 zero 1,000
Enrollment Service hours $950,000 24,000 36,000 2,000 zero

Required:
Prepare a schedule showing the support costs allocated to each department.

Answer 1

Answer:

Answer is explained in the explanation section below.

Explanation:

Solution:

First, we need to sort the data given to solve:

Data Given:

F&T Maintenance Hours:

Budget = $350,000

Engineering = 2,000

Computer Sciences =  5,000

F&T Maintenance = zero

Enrollment Service = 1,000

Enrollment Service hours:

Budget = $950,000

Engineering = 24,000

Computer Sciences =  36,000

F&T Maintenance = 2,000

Enrollment Service = zero

To solve this question, we are using the direct method to allocate the support cost.

Schedule to allocate the supporting costs.

F&T maintenance:

For Engineering

$350,000 × 2/7 =   $100,000

For Computer Science

$350,000 × 5/7 = $250,000

Enrollment Service:

For Engineering

$950,000 × 24/60 = $380,000

For Computer Science

$950,000 × 36/60 = $570,000

Total:

For Engineering Total = $100,000 + $380,000 = $480,000

For Computer Science Total = $250,000 + $570,000 = $820,000