Bucknum Boys, Inc., produces hunting gear for buck hunting. The company’s main production departments are Molding and Finishing. Production of the hunting gear cannot be accomplished without the supporting tasks of Materials Management and meals for production employees provided by the Cafeteria. Cafeteria costs are always higher than Materials Management costs. The company believes that the number of employees in each department is the best driver of Cafeteria costs. The number of employees in each department is as follows: The company also believes that the value of support materials used in each department is the best driver for Materials Management costs. The support materials used in the Molding and Molding Department 27 Finishing Department 30 Materials Management Department 3 Cafeteria Department 6 Finishing departments are valued at $1,800 and $2,700, respectively. Using the sequential method for support department cost allocation (allocating Cafeteria costs first), determine (a) the percentage of Cafeteria costs that should be allocated to the Molding Department and (b) the percentage of Materials Management costs that should be allocated to the Finishing Department.
Bucknum Boys, Inc., produces hunting gear for buck hunting. The company’s main production
departments are Molding and Finishing. Production of the hunting gear cannot be
accomplished without the supporting tasks of Materials Management and meals for production
employees provided by the Cafeteria. Cafeteria costs are always higher than Materials
Management costs. The company believes that the number of employees in each department
is the best driver of Cafeteria costs. The number of employees in each department is as
follows:
The company also believes that the value of support materials used in each department is the
best driver for Materials Management costs. The support materials used in the Molding and
Molding Department 27
Finishing Department 30
Materials Management
Department 3
Cafeteria Department 6
Finishing departments are valued at $1,800 and $2,700, respectively. Using the sequential
method for support department cost allocation (allocating Cafeteria costs first), determine
(a) the percentage of Cafeteria costs that should be allocated to the Molding Department
and
(b) the percentage of Materials Management costs that should be allocated to the
Finishing Department.
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