Woodstock Binding has two service departments, IT (Information Technology) and HR (Human...
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Accounting
Woodstock Binding has two service departments, IT Information Technology and HR Human Resources and two operating departments, Publishing and Binding. Management has decided to allocate IT costs on the basis of IT Tickets issued with each IT request in each department and HR costs on the basis of employees in each department.
The following data appear in the company records for the current period:
IT HR Publishing Binding
IT tickets
Employees
Department direct costs $ $ $ $
Required:
Allocate the service department costs using the reciprocal method. Matrix algebra is not required because there are only two service departments.
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