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Exercise 17-17 Direct Method of Service Department Cost Allocation; Bank (LO 17-1) Tuscaloosa National Bank...

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Accounting

Exercise 17-17 Direct Method of Service Department Cost Allocation; Bank (LO 17-1)

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
User of Service HR Computing
HR 20 %
Computing 20 %
Deposit 50 % 40 %
Loan 30 % 40 %

The budgeted costs in the two service departments for the year are as follows:

HR $ 162,000
Computing 231,500

Required: Use the direct method to allocate the budgeted costs of the HR and Computing departments to the Deposit and Loan departments. (Do not round intermediate calculations.)

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