Class Examples for Cost Allocation for Multiple Support Departments Example 2 Budgeted Data: Support Departments Facility Service Personnel $100,000 $60,000 6,000 8,000 5 VC or VMOH base: sq ft base: employees 25 Operating Depts Mixing $130,000 12,000 10 Canning $170,000 10,000 20 Assume that the budgeted number of square footage and budgeted number of employees equal the actual for each, respectively. The cost driver for the Facility Service department is square footage and the cost driver for the personnel department is the number of employees 1) Allocate the two support department costs to the two operating departments using a. Direct Method b. Stepdown Method c. Reciprocal Method

Class Examples for Cost Allocation for Multiple Support Departments Example 2 Budgeted Data: Support Departments Facility Service Personnel $100,000 $60,000 6,000 8,000 5 VC or VMOH base: sq ft base: employees 25 Operating Depts Mixing $130,000 12,000 10 Canning $170,000 10,000 20 Assume that the budgeted number of square footage and budgeted number of employees equal the actual for each, respectively. The cost driver for the Facility Service department is square footage and the cost driver for the personnel department is the number of employees 1) Allocate the two support department costs to the two operating departments using a. Direct Method b. Stepdown Method c. Reciprocal Method

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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Reciprocal Method Eilers Company has two producing departments and two support departments. The following budgeted data pertain to these four departments: Support Departments Producing Departments GeneralFactory Receiving Assembly Finishing Direct overhead $400,000 $160,000 $43,000 $74,000 Square footage — 2,700 5,400 5,400 Number of receiving orders 300 — 1,680 1,020 Direct labor hours — — 25,000 40,000 Required: 1. Allocate the overhead costs of the support departments to the producing departments using the reciprocal method. (Round allocation ratios to two decimal places. Round allocated costs to the nearest dollar. If an amount is zero, enter "0".) Allocation ratios: General Factory Receiving Assembly Finishing Square footage Number of receiving orders Allocations: General Factory Receiving Assembly Finishing Direct overhead cost $ $ $ $ General Factory Receiving Total $ $ $ $ 2. Using direct labor…
PART 3 Betty's Book and Music Store has two service departments, Warehouse and Data Centre. Warehouse Department costs of $175,000 are allocated on the basis of budgeted warehouse-hours. Data Centre Department costs of $75,000 are allocated based on the number of computer log-on hours. The costs of operating departments Music and Books are $125,000 and $150,000, respectively. Data on budgeted warehouse-hours and number of computer log-on hours are as follows: Support Departments Warehouse Production Departments Department Data Centre Department Music Books Budgeted costs $175,000 $75,000 $125,000 $150,000 Budgeted warehouse- NA 250 500 750 hours Number of computer hours 100 ΝΑ 400 500 Required: 1. Assign the support department costs to the production departments using: a. The Direct Method (3) b. The Step-Down Method assigning the Warehouse Department first (4) c. The Reciprocal Method using linear equations. (4)
Jamison Company has two service departments and two producing departments. Square footage of space occupied by each department follows: Custodial services 2,700 feet General administration 4,700 feet Producing Department A 9,700 feet Producing Department B 9,700 feet 26,800 feet The department costs of Custodial Services are allocated on a basis of square footage of space. If Custodial Services costs are budgeted at $55,000, the amount of cost allocated to General Administration under the direct method would be:
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A partial responsibility accounting report for a cost center is below. The value of letter (c) would be: Over (Under) Budget Controllable Costs Budgeted Actual Direct materials.... $52,800 $ a Direct labor....... 24,000 26,000 Utilities 19,200 C Totals... $96,000 $96,600 A $19,000 B $19,400 C) $54,000 D) $2,000 E None of the above $(1,200) b (200) $ 600
ces. Required information Use the following information for the Quick Studies below. (Algo) Rafner Manufacturing has the following budgeted data for its two production departments.. Budgeted Data Overhead cost Direct labor hours Machine hours Assembly $1,437,500 12,500 direct labor hours 5,500 machine hours Finishing $914,500 19,500 direct labor hours 15,500 machine hours QS 17-8 (Algo) Allocating overhead with departmental rates LO P2 Allocate overhead to a job that uses 75 direct labor hours in the Assembly department and uses 60 machine hours in the Finishing department Department Departmental Overhead Rate Hours Used Overhead Allocated Assembly S 1,437 000 per direct labor hour 12.500 DLHS $ 17.962.500,000 Finishing $ 914,500 per direct labor hour i 19.500 OLHS 17,832,750,000 Total $ 35.795.250.000
Direct Method Eilers Company has two producing departments and two support departments. The following budgeted data pertain to these four departments: Support Departments Producing Departments General Factory Receiving Assembly Finishing Direct overhead $430,000 $170,000 $45,000 $76,000 Square footage 2,500 5,000 5,000 Number of receiving orders 320 1,900 1,200 Direct labor hours 28,000 45,000 The company has decided to simplify its method of allocating support service costs by switching to the direct method. Required: 1. Allocate the costs of the support departments to the producing departments using the direct method. Round allocation ratios to four significant digits. Round allocated costs to the nearest dollar. Use the rounded values for subsequent calculations. Allocation ratios: Assembly Finishing Square footage Number of receiving orders
JPS CC collected the following statistics in order to allocate their overheads among the various departments: Cost items Production A Production B Service C Value of equipment N$ 15 000 N$ 9 000 N$ 6 000 Number of employees 36 24 20 Floor space 400m^2 300m^2 200m^2 Material used N$ 40 000 N$ 30 000 N$ 5 000 Direct labour hours 1 300 700 905 Machine hours 450 305 195 the following amounts represent the budgeted overheads for 2019: Depreciation on equipment 900 Rent of factor building 2 250 Electricity factory 900 Protective clothing 800 Cafeteria 720 Insurance building 450 Insurance machinery 750 Overhead allocation rates are based on labour hours, while the secondary apportionment of the service department takes place according to machine hours. Required: (a) Calculate the overhead analysis of each of the two production departments for 2003 (b) Calculate the absorption rate for the production departments. (c) What causes under/over absorption rates.
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Example 1 Budgeted Data: Support Departments Janitor $415,000 12,000 VC or VMOH base: sq. ft. base: employees 25 (2) the step-down method, and Personnel $150,000 20,000 (3) the reciprocal method. 4 Operating Departments Mixing $130,000 10,000 75 Canning Determine the amount of Janitor and Personnel department costs that would be allocated to the Mixing and Canning departments' budgets using (1) the direct method $170,000 70,000 50
Bike-O-Rama produces two bike models: Voltage and EasyRider. Departmental overhead data follow. Department Fabricating Assembly Budgeted Cost $ 147,000 145,200 Allocation Base Machine hours (MH) Direct labor hours (DLH) Budgeted Usage 9,800 MH 3,300 DLH Required: 1. Compute departmental overhead rates using (a) machine hours to allocate budgeted Fabricating costs and (b) direct labor hours to allocate budgeted Assembly costs. 2. The company reports the following actual production usage data. Compute the overhead cost per unit for each model. Voltage 2.0 MH 2.0 DLH EasyRider 4.0 MH 0.5 DLH 3. The company reports additional information below. For each model, compute the product cost per unit. Machine hours per unit Direct labor hours per unit Selling Price $ 290 195 Per Unit Voltage EasyRider Direct Materials $ 108 98 4. For each model, compute gross profit per unit (selling price per unit minus product cost per unit). Direct Labor $ 47 20 Complete this question by entering your answers…