Homework Help is Here – Start Your Trial Now!
Business
Accounting
equired: Allocate the costs of the support departments to the producing departments using the direct method. Round allocation ratios to four gnificant digits. Round allocated costs to the nearest dollar. Use the rounded values for subsequent calculations. llocation ratios:

equired: Allocate the costs of the support departments to the producing departments using the direct method. Round allocation ratios to four gnificant digits. Round allocated costs to the nearest dollar. Use the rounded values for subsequent calculations. llocation ratios:

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
**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** | | |
Transcribed Image Text:**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** | | |
### Allocation Ratios #### Assembly | Finishing - **Square footage** - **Number of receiving orders** --- ### Allocations #### Assembly | Finishing - **General Factory** - $____ | $____ - **Receiving** - $____ | $____ - **Direct costs** - $____ | $____ - **Total** - $____ | $____ --- ### 2. Using direct labor hours, compute departmental overhead rates. (Round to the nearest cent.) #### Overhead Rate - **Assembly** - ____ per direct labor hour - **Finishing** - ____ per direct labor hour
Transcribed Image Text:### Allocation Ratios #### Assembly | Finishing - **Square footage** - **Number of receiving orders** --- ### Allocations #### Assembly | Finishing - **General Factory** - $____ | $____ - **Receiving** - $____ | $____ - **Direct costs** - $____ | $____ - **Total** - $____ | $____ --- ### 2. Using direct labor hours, compute departmental overhead rates. (Round to the nearest cent.) #### Overhead Rate - **Assembly** - ____ per direct labor hour - **Finishing** - ____ per direct labor hour
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
Knowledge Booster
Cost allocation
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
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