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
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 24E: Refer to the data in Exercise 7.22. The support departments are ranked in order of highest cost to...
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Transcribed Image Text:please help me with all 3 parts, Direct Method, Stepdown Method, and 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
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