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Salsa has two service departments, the IT Department and HR Department. Salsa also has two production departments, the Cutting department and the Mixing Department. The usage of the two service departments’ output for the year is as follows:   Provider of Service   User of Service   IT HR IT   - 15 % HR   5 % - Cutting   45 % 25 % Mixing   50 % 60 %   The budgeted costs in the two service departments for the year as follows: IT: $ 400,000 HR: $ 600,000 Use a.) direct method, b.) step-down method and c.) reciprocal services method to allocate the budgeted costs of the two service departments to production departments. Please donot provide solution in image format provide solution in step by step and fast solution

Salsa has two service departments, the IT Department and HR Department. Salsa also has two production departments, the Cutting department and the Mixing Department. The usage of the two service departments’ output for the year is as follows:   Provider of Service   User of Service   IT HR IT   - 15 % HR   5 % - Cutting   45 % 25 % Mixing   50 % 60 %   The budgeted costs in the two service departments for the year as follows: IT: $ 400,000 HR: $ 600,000 Use a.) direct method, b.) step-down method and c.) reciprocal services method to allocate the budgeted costs of the two service departments to production departments. Please donot provide solution in image format provide solution in step by step and fast solution

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 2BE: Multiple production department factory overhead rates The total factory overhead for Bardot Marine...
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Salsa has two service departments, the IT Department and HR Department. Salsa also has two production departments, the Cutting department and the Mixing Department. The usage of the two service departments’ output for the year is as follows:

  Provider of Service  
User of Service   IT HR
IT   - 15 %
HR   5 % -
Cutting   45 % 25 %
Mixing   50 % 60 %

 

The budgeted costs in the two service departments for the year as follows:

IT: $ 400,000

HR: $ 600,000

Use a.) direct method, b.) step-down method and c.) reciprocal services method to allocate the budgeted costs of the two service departments to production departments.

Please donot provide solution in image format provide solution in step by step and fast solution

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