Tuscaloosa National Bank has two service departments, the Human Resources (HR) Department and the Computing Department. Thebank has two other departments that directly service customers, the Deposit Department and the Loan Department. The usage of thetwo service departments' output for the year is as follows:User of ServiceHRComputingDepositLoanHRComputingProvider of ServiceHRComputing10%The budgeted costs in the two service departments for the year are as follows:$466,000699,00010%70%20%45%45%Required:Use the step-down method to allocate the budgeted costs of the HR and Computing departments to the Deposit and Loandepartments. Tuscaloosa National Bank allocates the costs of the HR Department first. (Do not round intermediate calculations.)Allocation of HR Department costsAllocation of Computing Department costsTotal costs allocated to each department$Deposit0 $Loan0

The step-down method is used to allocate the support department's cost to another support department…

Required: Use the step-down method to allocate the budgeted costs of the HR and Computing departments to the Deposit and Loan departments. Tuscaloosa National Bank allocates the costs of the HR Department first. (Do not round intermediate calculations.)

Required: Use the step-down method to allocate the budgeted costs of the HR and Computing departments to the Deposit and Loan departments. Tuscaloosa National Bank allocates the costs of the HR Department first. (Do not round intermediate calculations.)

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter3: Cost Behavior

Section: Chapter Questions

Problem 38P: Friendly Bank is attempting to determine the cost behavior of its small business lending operations....

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Tuscaloosa National Bank has two service departments, the Human Resources (HR) Department and the Computing Department. The bank has two other departments that directly service customers, the Deposit Department and the Loan Department. The usage of the two service departments' output for the year is as follows: Provider of Service HR 0 Computing 15% 15% 0 60% 55% 25% 30% User of Service HR Computing Deposit Loan The budgeted costs in the two service departments for the year are as follows: HR Computing Required: $ 499,000 728,500 Use the reciprocal-services method to allocate the budgeted costs of the HR and Computing departments to the Deposit and Loan departments. Note: Do not round your Intermediate calculations and round final answers to the nearest dollar amount. Provider of Service Allocation of HR Department costs Allocation of Computing Department costs Total costs allocated to each department Deposit Loan
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