Homework SourseReferring to the same problem as above the County department
Referring to the same problem as above, the County departments will utilize a total of 30,000 hours of service time, broken down according to the table below. How does the IT Department bill the $3,000,000 to each department (i.e. How much should each department be billed in order to cover the $3,000,000 IT costs?) (Again, format your answer in dollar amounts only. Do not use the dollar sign ($) or any commas.)
Department Hours of processing time used
Finance 12,000
Water 6,000
Police 2,000
Planning 10,000
TOTAL 30,000 Total amount to be billed$3,000,000
Solution
Billing for each service hour
= Budgeted Activity / Budgeted hours of service
= $3,000,000 / 30,000
= $ 100 per hour
| Calculations | A | B | C = A x B |
| Department | Hours used | Allocation rate | Cost allocated |
| Finance | 12,000 | 100 | 1,200,000 |
| Water | 6,000 | 100 | 600,000 |
| Police | 2,000 | 100 | 200,000 |
| Planning | 10,000 | 100 | 1,000,000 |
| 30,000 | 3,000,000 |
