Raspberries R Us has two operating units (Jam and Jelly) and two support departments (HR and Accounting). The estimated operating costs and percentages of services used by these departments are as follows: Instructions
a.Allocate the support department costs to the operating units using the direct method of allocating costs.
b.Allocate the support department costs to the operating units using the step method of allocating costs. The departments are ranked based on the highest costs.
c.Which of the two methods would you recommend for Raspberries R Us and why?

Question

Raspberries R Us has two operating units (Jam and Jelly) and two support departments (HR and Accounting). The estimated operating costs and percentages of services used by these departments are as follows:  Instructions 
a.Allocate the support department costs to the operating units using the direct method of allocating costs.
b.Allocate the support department costs to the operating units using the step method of allocating costs. The departments are ranked based on the highest costs.
c.Which of the two methods would you recommend for Raspberries R Us and why?

Quizplus · Accepted Answer

The Answer of Raspberries R Us has two operating units (Jam and Jelly) and two support departments (HR and Accounting). The estimated operating costs and percentages of services used by these departments are as follows:  Instructions 
a.Allocate the support department costs to the operating units using the direct method of allocating costs.
b.Allocate the support department costs to the operating units using the step method of allocating costs. The departments are ranked based on the highest costs.
c.Which of the two methods would you recommend for Raspberries R Us and why?

Raspberries R Us Has Two Operating Units (Jam and Jelly)