Referring to the same problem as above, the County departments will utilize a to
ID: 2606460 • Letter: R
Question
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
Explanation / Answer
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