**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 ||------------------------|----------------------------|-------------------------|| | General Factory | Receiving | Assembly | Finishing || **Direct overhead** | $400,000 | $150,000 | $45,000 | $71,000 || **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** | | | | |**Instruction:**The tables above show the distribution of direct overhead costs across various departments, as well as the relevant metrics (square footage, number of receiving orders, direct labor hours) that are used to allocate these costs. The reciprocal method will take into account the interdependence of support departments when allocating costs to producing departments. Be sure to calculate the allocation ratios accurately and apply them to distribute costs accordingly. ### Allocation Ratios#### Categories: - General Factory- Receiving- Assembly- Finishing**Square Footage:***Input fields for each category***Number of Receiving Orders:***Input fields for each category*### Allocations#### Categories:- General Factory- Receiving- Assembly- Finishing**Direct Overhead Cost:***Input fields for each category***General Factory:***Input field for each category***Receiving:***Input field for each category***Total:***Input fields for each category*---### 2. Compute Departmental Overhead Rates**Using direct labor hours. Round to the nearest cent.**#### Overhead Rate**Assembly:***Input field* per direct labor hour**Finishing:***Input field* per direct labor hour

Name: **Reciprocal Method**Eilers Company has two producing departments and
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Description: **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 ||---------

There are 3 methods to allocate support department costs:- Direct method Step method Reciprocal…

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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 $400,000 $150,000 $45,000 $71,000 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".)

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 $400,000 $150,000 $45,000 $71,000 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".)

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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