31 the direct allocation method does not allocate support department costs to other 4301280
31) The direct allocation method does not allocate support department costs to other support departments.
32) The reciprocal method allocates support-department costs to operating departments by fully recognizing the mutual services provided among all support departments.
33) Both direct and the step-down method can provide relevant information for outsourcing decisions.
34) Complete reciprocated costs is the support department's own costs plus any interdepartmental cost allocations.
35) The direct allocation method provides key information for outsourcing decisions regarding support services.
36) An advantage of the reciprocal method is that it highlights the complete reciprocated costs of support departments and how these costs differ from budgeted or actual costs of the departments.
37) The direct method is conceptually the most precise method because it considers the mutual services provided among all support departments.
38) The step-down method allocates support department costs to only operating departments in a sequential manner.
39) Under the step-down method, once a support department's costs have been allocated, all subsequent support-department costs are allocated back to it.
40) Tryst University offers only high-tech graduate-level programs. Tryst has two principal operating departments, Engineering and Social 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 $450,000, while the Enrollment Services budget is $900,000. The following chart summarizes budgeted amounts and allocation-base amounts used by each department:
|
|
Services Provided: (Annually) |
|||||
|
|
Budget |
Engineering |
Social Sciences |
F&T Maintenance |
Enrollment Service |
|
|
F&T Maintenance (in hours) |
$450,000 |
3,000 |
6,000 |
Zero |
1,000 |
|
|
Enrollment Service (in credit hrs) |
$900,000 |
25,000 |
35,000 |
2,000 |
Zero |
|
Required:
Use the direct method to allocate support costs to each of the two principal operating departments, Engineering and Social Sciences. Prepare a schedule showing the support costs allocated to each department.