Caris Company is a manufacturer with two production departments (Machining and Assembly) as well as two support departments (Materials Requisitions and Utility Services). For the last quarter of 2020, Caris's cost records indicate the following: Budgeted overhead costs SUPPORT Materials Utility Requisitions Services (US) $2,000,000 (MR) $400,000 before any inter- department cost allocations Support work 0 25% PRODUCTION Machining Assembly Total $9,456,000 $13,458,000 $25,314,000 40% 35% 100%
Caris Company is a manufacturer with two production departments (Machining and Assembly) as well as two support departments (Materials Requisitions and Utility Services). For the last quarter of 2020, Caris's cost records indicate the following: Budgeted overhead costs SUPPORT Materials Utility Requisitions Services (US) $2,000,000 (MR) $400,000 before any inter- department cost allocations Support work 0 25% PRODUCTION Machining Assembly Total $9,456,000 $13,458,000 $25,314,000 40% 35% 100%
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Allocate the two support departments’ costs to the two operating departments using the following methods:
The Algebraic/reciprocal method?
![Caris Company is a manufacturer with two production departments (Machining and
Assembly) as well as two support departments (Materials Requisitions and Utility Services).
For the last quarter of 2020, Caris's cost records indicate the following:
Budgeted
overhead costs
before any inter-
department cost
allocations
Support work
supplied by MR
(Number of
requisitions)
Support work
supplied by US
(Power costs)
Materials Utility
Requisitions Services
(US)
SUPPORT
0
10%
(MR)
$400,000 $2,000,000 $9,456,000 $13,458,000 $25,314,000
25%
Machining Assembly Total
PRODUCTION
40%
30%
35%
60%
100%
100%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2abd1cdc-ee4f-4da0-a2ac-96a52c2f0c72%2Fbcf44725-c4d6-4905-a05a-e3240c8d73b3%2Fsy4de7n_processed.png&w=3840&q=75)
Transcribed Image Text:Caris Company is a manufacturer with two production departments (Machining and
Assembly) as well as two support departments (Materials Requisitions and Utility Services).
For the last quarter of 2020, Caris's cost records indicate the following:
Budgeted
overhead costs
before any inter-
department cost
allocations
Support work
supplied by MR
(Number of
requisitions)
Support work
supplied by US
(Power costs)
Materials Utility
Requisitions Services
(US)
SUPPORT
0
10%
(MR)
$400,000 $2,000,000 $9,456,000 $13,458,000 $25,314,000
25%
Machining Assembly Total
PRODUCTION
40%
30%
35%
60%
100%
100%
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