Question

Service Department Charges The centralized computer technology department of Hardy Company has expenses of $274,500. The department has provided a total of 18,300 hours of service for the period. The Retail Division has used 4,941 hours of computer technology service during the period, and the Commercial Division has used 13,359 hours of computer technology service. How much should each division be charged for computer technology department services

Answer 1

Retail Division $74,115

Commercial Division $200,385

Explanation:

Calculation to determine How much should each division be charged for computer technology department services

RETAIL DIVISION

Using this formula

Retail Division=(Expense/Total Number of hours)*Retail Division Number of hours used

Let plug in the formula

Retail Division=($274,500 / 18,300 hrs)*4,941 hours

Retail Division=15*4,941 hours

Retail Division=$74,115

COMMERCIAL DIVISION

Using this formula

Commercial Division=(Expense/Total Number of hours)* Commercial Division Number of hours used

Let plug in the formula

Commercial Division=($274,500 / 18,300 hrs)* 13,359 hours

Commercial Division=15* 13,359 hours

Commercial Division=$200,385

Therefore The amount that each division should be charged for computer technology department services is:

Retail Division $74,115

Commercial Division $200,385