The direct method is used by Kurpinski Clinic to allocate its service department costs to its operating departments. Data concerning those departments follow:
Information Technology costs are allocated on the basis of computers and Personnel costs are allocated on the basis of employees. Required: Allocate the service department costs to the operating departments using the direct method.
Definitions:
Comparative Balance Sheet
A financial statement that presents the financial position of a company at two or more points in time, allowing for comparison and analysis of changes.
Cash Dividend
A payment made by a company out of its profits to its shareholders in the form of cash.
Investing Activities
Activities that involve the acquisition and disposal of long-term assets and other investments not included in cash equivalents.
Cash Dividends
A portion of a company's earnings that is paid out to shareholders, typically in the form of cash.
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