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Chapter 7 Homework Support Departments Direct costs Normal activity: Number of employees Square footage Producing Departments Human Resources Factory General Fabricating Assembly $140,000 $330,000 $114,800 $95,000 60 80 170 1,000 5,700 13,300 The costs of the Human Resources Department are allocated on the basis of number of employees, and the costs of General Factory are allocated on the basis of square footage. Now assume that Valron Company uses the reciprocal method to allocate support department costs. equired: 1. Calculate the allocation ratios (rounded to four significant digits) for the four departments using the reciprocal method. If an amount is zero, enter "0". Use the rounded values for subsequent calculations. Proportion of Driver Used by Human Resources General Factory Fabricating Assemb Human Resources General Factory 2. Develop a simultaneous equations system of total costs for the support departments. If required, round your answers to four decimal places. Use these numbers for subsequent calculations. If required, round all other intermediate calculations to six decimal places, except the answers computed in requirement 1. Human Resources (HR) General Factory (GF) + (GF) (HR) Solve for the total reciprocated costs of each support department. (Round reciprocated total costs to the nearest dollar.) Human Resources (HR) General Factory (GF)

Chapter 7 Homework Support Departments Direct costs Normal activity: Number of employees Square footage Producing Departments Human Resources Factory General Fabricating Assembly $140,000 $330,000 $114,800 $95,000 60 80 170 1,000 5,700 13,300 The costs of the Human Resources Department are allocated on the basis of number of employees, and the costs of General Factory are allocated on the basis of square footage. Now assume that Valron Company uses the reciprocal method to allocate support department costs. equired: 1. Calculate the allocation ratios (rounded to four significant digits) for the four departments using the reciprocal method. If an amount is zero, enter "0". Use the rounded values for subsequent calculations. Proportion of Driver Used by Human Resources General Factory Fabricating Assemb Human Resources General Factory 2. Develop a simultaneous equations system of total costs for the support departments. If required, round your answers to four decimal places. Use these numbers for subsequent calculations. If required, round all other intermediate calculations to six decimal places, except the answers computed in requirement 1. Human Resources (HR) General Factory (GF) + (GF) (HR) Solve for the total reciprocated costs of each support department. (Round reciprocated total costs to the nearest dollar.) Human Resources (HR) General Factory (GF)

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter7: Allocating Costs Of Support Departments And Joint Products
Section: Chapter Questions
Problem 4CE: Refer to Cornerstone Exercise 7.3. Now assume that Valron Company uses the sequential method to...
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Chapter 7 Homework Support Departments Direct costs Normal activity: Number of employees Square footage Producing Departments Human Resources Factory General Fabricating Assembly $140,000 $330,000 $114,800 $95,000 60 80 170 1,000 5,700 13,300 The costs of the Human Resources Department are allocated on the basis of number of employees, and the costs of General Factory are allocated on the basis of square footage. Now assume that Valron Company uses the reciprocal method to allocate support department costs. equired: 1. Calculate the allocation ratios (rounded to four significant digits) for the four departments using the reciprocal method. If an amount is zero, enter "0". Use the rounded values for subsequent calculations. Proportion of Driver Used by Human Resources General Factory Fabricating Assemb Human Resources General Factory 2. Develop a simultaneous equations system of total costs for the support departments. If required, round your answers to four decimal places. Use these numbers for subsequent calculations. If required, round all other intermediate calculations to six decimal places, except the answers computed in requirement 1. Human Resources (HR) General Factory (GF) + (GF) (HR) Solve for the total reciprocated costs of each support department. (Round reciprocated total costs to the nearest dollar.) Human Resources (HR) General Factory (GF)
Transcribed Image Text:Chapter 7 Homework Support Departments Direct costs Normal activity: Number of employees Square footage Producing Departments Human Resources Factory General Fabricating Assembly $140,000 $330,000 $114,800 $95,000 60 80 170 1,000 5,700 13,300 The costs of the Human Resources Department are allocated on the basis of number of employees, and the costs of General Factory are allocated on the basis of square footage. Now assume that Valron Company uses the reciprocal method to allocate support department costs. equired: 1. Calculate the allocation ratios (rounded to four significant digits) for the four departments using the reciprocal method. If an amount is zero, enter "0". Use the rounded values for subsequent calculations. Proportion of Driver Used by Human Resources General Factory Fabricating Assemb Human Resources General Factory 2. Develop a simultaneous equations system of total costs for the support departments. If required, round your answers to four decimal places. Use these numbers for subsequent calculations. If required, round all other intermediate calculations to six decimal places, except the answers computed in requirement 1. Human Resources (HR) General Factory (GF) + (GF) (HR) Solve for the total reciprocated costs of each support department. (Round reciprocated total costs to the nearest dollar.) Human Resources (HR) General Factory (GF)
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