Becker Tabletops has two support departments ( Janitorial and Cafeteria) and two production departments (Cutting and Assembly). Relevant details for these departments are as follows: Support Department Cost Driver Janitorial Department Square footage to be serviced Cafeteria Department Number of employees Janitorial Department Cafeteria Department Cutting Department Assembly Department Department costs $310,000 $169,000 $1,504,000 $680,000 Square feet 50 5,000 1,000 4,000 Number of employees 10 3 30 10 Allocated the support department costs to the production departments using the direct method below. Cutting Department Assembly Department Janitorial Department cost allocation $62,000 $248,000 Cafeteria Department cost allocation $126,750 $42,250 Allocated the support department costs to the production departments using the reciprocal services method below. Cutting Department Assembly Department Janitorial Department cost allocation $38,200 $152,800 Cafeteria Department cost allocation $216,000 $72,000 Allocated the support department costs to the production departments and Cafeteria Department using the sequential method below. Cafeteria Department Cutting Department Assembly Department Janitorial Department cost allocation $155,000 $31,000 $124,000 Cafeteria Department cost allocation $243,000 $81,000 Compare the total support department costs allocated to each production department under each cost allocation method. a. Which production department is allocated the most support department costs under the direct method? Cost Assembly Department $fill in the blank 2 b. Which production department is allocated the most support department costs under the sequential method? Cost Cutting Department $fill in the blank 4 c. Which production department is allocated the most support department costs under the reciprocal services method? Cost Cutting Department $fill in the blank 6

Becker Tabletops has two support departments ( Janitorial and Cafeteria) and two production departments (Cutting and Assembly). Relevant details for these departments are as follows: Support Department Cost Driver Janitorial Department Square footage to be serviced Cafeteria Department Number of employees Janitorial Department Cafeteria Department Cutting Department Assembly Department Department costs $310,000 $169,000 $1,504,000 $680,000 Square feet 50 5,000 1,000 4,000 Number of employees 10 3 30 10 Allocated the support department costs to the production departments using the direct method below. Cutting Department Assembly Department Janitorial Department cost allocation $62,000 $248,000 Cafeteria Department cost allocation $126,750 $42,250 Allocated the support department costs to the production departments using the reciprocal services method below. Cutting Department Assembly Department Janitorial Department cost allocation $38,200 $152,800 Cafeteria Department cost allocation $216,000 $72,000 Allocated the support department costs to the production departments and Cafeteria Department using the sequential method below. Cafeteria Department Cutting Department Assembly Department Janitorial Department cost allocation $155,000 $31,000 $124,000 Cafeteria Department cost allocation $243,000 $81,000 Compare the total support department costs allocated to each production department under each cost allocation method. a. Which production department is allocated the most support department costs under the direct method? Cost Assembly Department $fill in the blank 2 b. Which production department is allocated the most support department costs under the sequential method? Cost Cutting Department $fill in the blank 4 c. Which production department is allocated the most support department costs under the reciprocal services method? Cost Cutting Department $fill in the blank 6

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Becker Tabletops has two support departments ( Janitorial and Cafeteria) and two production departments (Cutting and Assembly). Relevant details for these departments are as follows:

Support Department		Cost Driver
Janitorial Department		Square footage to be serviced
Cafeteria Department		Number of employees

	Janitorial Department	Cafeteria Department	Cutting Department	Assembly Department
Department costs	$310,000	$169,000	$1,504,000	$680,000
Square feet	50	5,000	1,000	4,000
Number of employees	10	3	30	10

Allocated the support department costs to the production departments using the direct method below.

	Cutting Department	Assembly Department
Janitorial Department cost allocation	$62,000	$248,000
Cafeteria Department cost allocation	$126,750	$42,250

Allocated the support department costs to the production departments using the reciprocal services method below.

	Cutting Department	Assembly Department
Janitorial Department cost allocation	$38,200	$152,800
Cafeteria Department cost allocation	$216,000	$72,000

Allocated the support department costs to the production departments and Cafeteria Department using the sequential method below.

	Cafeteria Department	Cutting Department	Assembly Department
Janitorial Department cost allocation	$155,000	$31,000	$124,000
Cafeteria Department cost allocation		$243,000	$81,000

Compare the total support department costs allocated to each production department under each cost allocation method.

a. Which production department is allocated the most support department costs under the direct method?

		Cost
Assembly Department		$fill in the blank 2

b. Which production department is allocated the most support department costs under the sequential method?

		Cost
Cutting Department		$fill in the blank 4

c. Which production department is allocated the most support department costs under the reciprocal services method?

		Cost
Cutting Department		$fill in the blank 6

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