Homework Help is Here – Start Your Trial Now!
Business
Accounting
Cutting department Finishing department Maintenance department Warehousing department Factory office P 240,000 168,000 40,340 30,000 65,000 The controller also provides the following tabulation of the interdependend Services provided by Maintenance Warehousing | Factory office To Department Cutting Finishing Maintenance Warehousing Factory office 45% 50% 62% 28 32 38 10 15 12 8

Cutting department Finishing department Maintenance department Warehousing department Factory office P 240,000 168,000 40,340 30,000 65,000 The controller also provides the following tabulation of the interdependend Services provided by Maintenance Warehousing | Factory office To Department Cutting Finishing Maintenance Warehousing Factory office 45% 50% 62% 28 32 38 10 15 12 8

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question
Exercise 5-6. ALLOCATION OF SERVICE DEPARTMENT COSTS
Exercise 5 - 6. ALLOCATION OF SERVICE DEPARTMENT COSTS The controller of MM Company estimates that factory overhead will be as follows producing departments and three service departments. P 240,000 Cutting department Finishing department Maintenance department Warehousing department Factory office 168,000 40,340 30,000 65,000 The controller also provides the following tabulation of the interdependence of departments: Services provided by Warehousing Factory office 50% To Department Cutting Finishing Maintenance Warehousing Factory office The estimated direct labor cost for purposes of determining applied overhead rates are: Maintenance 45% 62% 28 32 38 10 15 12 8. P 300,000 Cutting department Finishing department 200,000 REQUIRED: On the basis of the foregoing information set up a schedule 1. Showing the three redistribution methods as follows: a. Direct method (Round to nearest peso) b. Step method. Distribute maintenance first. (Round to nearest peso) c. Linear algebra method 2. Compute the overhead application rate based on direct labor under each method. (Round to one decimal place only) 1. Direct Method 2. Step Method 3. Linear Algebra Method
Transcribed Image Text:Exercise 5 - 6. ALLOCATION OF SERVICE DEPARTMENT COSTS The controller of MM Company estimates that factory overhead will be as follows producing departments and three service departments. P 240,000 Cutting department Finishing department Maintenance department Warehousing department Factory office 168,000 40,340 30,000 65,000 The controller also provides the following tabulation of the interdependence of departments: Services provided by Warehousing Factory office 50% To Department Cutting Finishing Maintenance Warehousing Factory office The estimated direct labor cost for purposes of determining applied overhead rates are: Maintenance 45% 62% 28 32 38 10 15 12 8. P 300,000 Cutting department Finishing department 200,000 REQUIRED: On the basis of the foregoing information set up a schedule 1. Showing the three redistribution methods as follows: a. Direct method (Round to nearest peso) b. Step method. Distribute maintenance first. (Round to nearest peso) c. Linear algebra method 2. Compute the overhead application rate based on direct labor under each method. (Round to one decimal place only) 1. Direct Method 2. Step Method 3. Linear Algebra Method
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS