COST ASSIGNMENT-ALLOCATION OF SUPPORT DEPARTMENT COSTS

A.)
A.1 DIRECT METHOD
1 Data processing Direct costs
hours of use of X Y Z
per hour of use

2 Administration/personnel Direct costs

# of employees of X Y Z
per employee

X Y
D.P. 180000 220000
A.P. 171429 85714

Data Processing Administration

Costs 850000 400000
Allocation of Data Processing -850000
Allocation of Administration -400000
TOTAL COSTS 0 0

A.2 STEP METHOD

1 Data processing direct cost
hours of use
per hour of use

Admin X
237711.87 129661.02

2 Administration new cost

# of employees
per employee

X
273300

Data Processing Administration

Costs 850000 400000
Allocation of Data Processing -850000 237712
Allocation of Administration -637699
TOTAL COSTS 0 12.8699999999953

A.3 ALGEBRAIC
Data Processing
hrs of use % of total
D.P. _ _
 A.D. 3300 3300/11800
X 1800 1800/11800
Y 2200 2200/11800
Z 4500 4500/11800
total 11800

total admin cost= 400000+[(3300/11800)*(total D.P. cost)]

400000+[(3300/11800)*(D.P. cost + cost alocated to DP from Admin.)]
400000+((3300/11800)*(850000 DP old cost+(total admin cost*.07)))

A= 400000+[3300/11800*(850000+.07)A]
400000+(3300/11800*850000)+(3300/11800*.07A)
400000+237745+0.01866A
1A-0.020A= 637711.86
.9834A= 637711.86
A= 241758.19 or

total DP cost= 893403.4242 or

Data Processing Administration

Costs 850000 400000
Allocation of Data Processing -893403 249850
Allocation of Administration 43382 -241758
TOTAL COSTS -22 408092

B.)
B.1 DIRECT METHOD
1
Human Resources
Direct cost 360000
270000
1.33333333

2
Administration
Direct Cost 558000
330000
1.69090909090909
3
Maintenance
Direct Cost 170000
136000
1.25

Assembly Finishing
H.R. 192000.00 168000.00
A.D. 471763.611 86236.359
 Maintenance 95625 74375

H.R. A.D.
Costs 360000 558000
Allocation of Human Resources -360000 36000
Allocation of Administration -594000
Allocation of Maintenance
TOTAL 0 0
1088000
B.2 STEP METHOD
1 Administration 558000
441600
1.26358695652174

H.R Maintenance
70508.152173913 70508.152173913

2 Human Resources 430508.152173913

324000
1.3287288647343

Maintenance Assembly
71751.3586956522 191336.956521739

3 Maintenance 241751.358695652
136000
1.77758351982097

Assembly Finishing
135985.139266304 105766.219429348

H.R Admin
Costs 360000 558000
Allocation of Admin 70508.15 -558000
Alloation of Human Resoures -430508.152173913
Allocation of Maintenance
TOTAL 0 0

B.3 ALGEBRAIC
HR Admin
_ 55800/441600
36000/360000 _
54000/360000 55800/441600
144000/360000 279000/441600
126000/360000 51000/441600
total HR cost= ((55800/441600*558000)+(55800/41600*.1A))+((8500/170000)+(8500/17000
360000+(70508.15+.013A)+(8500+.008A)
1A-.979A= 439008.15
A= 448425.076608785 or

total Admin cost= 558000+448425.08+((25500/170000*170000)+(25500/170000*.10A))

558000+448425.08+(25500+.015A)
1A-0.015A 1031925.08
A= 1047639.68

total maintenance cost= 1666065

HR Admin
Costs 360000 558000
HR allocated -448425 44843
Admin allocated 132378.382862503 -1047639.68
Maintenance Alloated 83303.2375867844 249909.712760353
TOTAL 127257 -194887
 *final answers are marked In red
*answers are rounded off :)
850000
8500
100

400000
70
5714.29

Z
450000
142857

X Y Z
450000 300000 550000
180000 220000 450000
171429 85714 142857
801429 605714 1142857.25

850000 (highest)
11800
72.0339

Y Z
158474.58 324152.55

637699
70
9109.99

Y Z
136650 227750

X Y Z
450000 300000 550000
129661 158475 324153
273300 136650 227750
852961 595124 1101902

Admin Dept
# of employees
5 5/75) 7%
 28.00% _
15.00% 30 30/75 40%
19.00% 15 15/75 20%
38.00% 25 25/75 33%
100% 75 100%

cated to DP from Admin.)] which is 7%

+(total admin cost*.07)))

241758

893403

X Y Z
450000 300000 550000
136609 166967 341524
260290 130145 216909
846900 597112 1108432
Maintenance Assembly Finishing
170000 _ _
54000 140000 126000
66000 330000 198000
-290000 163125 126875
0 633125 450875
1084000

(highest)

Assembly Finishing
352540.7608696 64442.9348

Finishing
167419.8369565

Maintenance Assembly Finishing

170000 _ _
70508.15217391 352540.761 64442.93478261
71751.35869565 191336.957 167419.8369565
-241751.358696 135985.139 105766.2194293
70508.15217391 679862.857 337628.9911685

Maintenance
8500/170000
25500/170000
_
76500/170000
54500/170000
A))+((8500/170000)+(8500/170000*.15A))

448425.08

0)+(25500/170000*.10A))

Maintenance Assembly Finishing

170000 _ _
67264 179370.0 156949
132378.3828625 66189.1914 120990.9950894
-1666065 749729.138 583122.6631075
-1296423 995288 861062