Armidale University Offers Only High-Tech Graduate-Level Programs $\quad$ $\quad$

question 51

Essay

Armidale University offers only high-tech graduate-level programs.Armidale has two principal operating departments,Engineering and Computer 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 $500 000,while the Enrollment Services budget is $1 200 000.The following chart summarises budgeted amounts and allocation-base amounts used by each department:
$\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$$\text { Services Provided (Annually) }$ $\begin{array}{|c|c|c|c|c|c|}\hline&\text { Budget } & \text { Engineering } & \begin{array}{c}\text { Computer } \\\text { Sciences }\end{array} & \begin{array}{c}\text { F\&T } \\\text { Maintenance }\end{array} & \begin{array}{c}\text { Enrollment } \\\text { Services }\end{array}\\\hline \begin{array}{c}\text { F\& T } \\\text { Maintenance } \\\text { (in hours) }\end{array} & \$ 500000 & 2000 & 5000 & \text { Zero } & 1000 \\\hline \begin{array}{c}\text { Enrollment } \\\text { Services } \\\text { (incredit hrs) }\end{array} & \$ 1200000 & 24000 & 36000 & 2000 & \text { Zero }\\\hline\end{array}$

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Required:
Use the direct method to allocate support costs to each of the two principal operating departments,Engineering and Computer Sciences.Prepare a schedule showing the support costs allocated to each department.
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Definitions:

Liability

A financial obligation or debt owed by a business or individual to another entity, to be paid in the future.

Prepaid Rent

An expense that has been paid in advance and is considered an asset until the benefit of the payment is consumed.

Rent Expense

An expense incurred from occupying rental property or equipment for business operations.

Adjusting Entry

A journal entry made at the end of an accounting period to allocate income and expenditure to the appropriate periods, ensuring that revenues and expenses are matched.