Direct Method of Support Department Cost Allocation Vairon Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly. Direct costs Normal activity: Support Departments Producing Departments Human General Resources Factory Fabricating Assembly $160,000 $340,000 $114,600 $93,000 Direct costs Number of employees Square footage 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 squa footage. Valron Company uses the rect method of support department cost allocation. Required: Allocate: 60 lequired: 1. Calculate the allocation ratios for the four departments using the direct method. If an amount is zero, enter "0". Round your answer to the nearest cent. Proportion of Driver Used by General Factory Human Resources 80 Support Departments Human Resources 170 Human Resources General Factory 2. Using the direct method, allocate the costs of the Human Resources and General Factory departments to the Fabricating and Assembly departments. If an amoun zero, enter "0". General Factory Fabricating Assembly Producing Departments Fabricating Assembly
Direct Method of Support Department Cost Allocation Vairon Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly. Direct costs Normal activity: Support Departments Producing Departments Human General Resources Factory Fabricating Assembly $160,000 $340,000 $114,600 $93,000 Direct costs Number of employees Square footage 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 squa footage. Valron Company uses the rect method of support department cost allocation. Required: Allocate: 60 lequired: 1. Calculate the allocation ratios for the four departments using the direct method. If an amount is zero, enter "0". Round your answer to the nearest cent. Proportion of Driver Used by General Factory Human Resources 80 Support Departments Human Resources 170 Human Resources General Factory 2. Using the direct method, allocate the costs of the Human Resources and General Factory departments to the Fabricating and Assembly departments. If an amoun zero, enter "0". General Factory Fabricating Assembly Producing Departments Fabricating Assembly
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Direct Method of Support Department Cost Allocation
Vairon Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly.
Direct costs
Normal activity:
Number of employees
Square footage
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. Valron Company uses the rect method of support department cost allocation.
Required:
Required:
Support Departments Producing Departments
Human
General
Resources Factory Fabricating Assembly
$160,000 $340,000
$114,600
$93,000
Direct costs
1. Calculate the allocation ratios for the four departments using the direct method. If an amount is zero, enter "0". Round your answer to the nearest cent.
Proportion of Driver Used by
General Factory
Allocate:
Human Resources
General Factory
Total after allocation
60
Human Resources
80
Human Resources
General Factory
2. Using the direct method, allocate the costs of the Human Resources and General Factory departments to the Fabricating and Assembly departments. If an amount is
zero, enter "0".
Support Departments
Human Resources
Fabricating
General Factory
Assembly
Producing Departments
Fabricating
Assembly
CHL
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