Exercise 11-31 (Algo) Cost Allocation: Step Method (LO 11-3) 2. University Printers has two service departments (Maintenance and Personnel) and two operating departments (P Developing) Management has decided to allocate maintenance costs on the basis of machine-hours in each dep personnel costs on the basis of labor-hours worked by the employees in each. The following data appear in the company records for the current period. Printing Personnel 1,400 Maintenance பபரornng Labor-hours Department direct costs References 006 $12,000 $14,500 Required: Allocate the service department costs using the step method, starting with the Maintenance Department (Negative be indicated bya minus sign. Do not round intermediate calculations.) Maintenance Personnel Developing Gugu Maintenance 0000 008 2 099 (13,360) Total conts alocated 2of 4田 Next > Type here to search romotional offers.
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Because service departments exist to support the operating departments, their costs are allocated to them. Maintenance, administration, dining facilities, laundries, and receiving are all examples of service departments. At the same time, service departments assist multiple production departments, and accountants must allocate and account for all of these costs. It is critical that these service department costs be allocated to the functional departments so that the operating departments' costs are clearly and accurately reflected.
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