ervice Department costs are allocated to producing departments with the costs of Custodial Services allocated first on the basis of square feet of space occupied. The costs of the Cafeteria are allocated on the basis of number of employees. Predetermined overhead rates in the Cutting and Assembly Departments are based on machine-hours. Round all calculations to the nearest dollar. 1. Under the direct method of allocation, the amount of Custodial Services cost allocated to the Cutting Department would be: 2. Under the direct method of allocation, the predetermined overhead rate for the year in the Assembly Department would be 3.  Under the

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Russet Company has two service departments and two producing departments. Budgeted costs and budgeted activity in the various departments for the most recent year are presented below:

                                                                                            Custodial                                        Cutting                          Assembly
                                                                                             Services              Cafeteria            Department               Department
Overhead costs .........                                                          P252,000             P140,000              P600,000              P900,000
Square feet of 
    space occupied .....                                                                  1,000                    2,000                8,000                    10,000
Number of employees ....                                                                 20                         30                   150                          200
Machine-hours ..........                                                                                                                         40,000                   60,000

Service Department costs are allocated to producing departments with the costs of Custodial Services allocated first on the basis of square feet of space occupied. The costs of the Cafeteria are allocated on the basis of number of employees. Predetermined overhead rates in the Cutting and Assembly Departments are based on machine-hours. Round all calculations to the nearest dollar.

1. Under the direct method of allocation, the amount of Custodial Services cost allocated to the Cutting Department would be:

2. Under the direct method of allocation, the predetermined overhead rate for the year in the Assembly Department would be

3.  Under the step method of allocation, the amount of Custodial Services cost allocated to the Assembly Department would be:

4.  Under the step method of allocation, the amount of cost allocated from the Cafeteria to the Cutting Department would be:

5. Under the step method of allocation, the amount of cost allocated from the Cafeteria to Custodial Services would be:

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