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Great Ape Glassworks manufactures glass used for the screens on smartphones. It has two producing departments, P1 and P2, and only one service department, S1. The company is able to track overhead to the various departments but wants to allocate the service department costs to the producing departments. However, the company is not sure which of the multiple allocation bases should be selected. The data it collected appear in the table below. Department P1 P2 51 Overhead Assigned $ 159,000 263,500 80,000 Potential allocation base Employee headcount Space used (in square feet) Productive capacity (in units) 3-year average percentage of $1 output used P1 60 4,900 58,950 60% P2 20 9,100 72,050 40% Required: 1. Determine the total estimated overhead cost for each of the producing departments after allocating the cost of the service department: a. Using employee headcount as the allocation base. b. Using occupied space as the allocation base. c. Using productive capacity as the allocation base. d. Using the 3-year average use as the allocation base.

Great Ape Glassworks manufactures glass used for the screens on smartphones. It has two producing departments, P1 and P2, and only one service department, S1. The company is able to track overhead to the various departments but wants to allocate the service department costs to the producing departments. However, the company is not sure which of the multiple allocation bases should be selected. The data it collected appear in the table below. Department P1 P2 51 Overhead Assigned $ 159,000 263,500 80,000 Potential allocation base Employee headcount Space used (in square feet) Productive capacity (in units) 3-year average percentage of $1 output used P1 60 4,900 58,950 60% P2 20 9,100 72,050 40% Required: 1. Determine the total estimated overhead cost for each of the producing departments after allocating the cost of the service department: a. Using employee headcount as the allocation base. b. Using occupied space as the allocation base. c. Using productive capacity as the allocation base. d. Using the 3-year average use as the allocation base.

FINANCIAL ACCOUNTING
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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Great Ape Glassworks manufactures glass used for the screens on smartphones. It has two producing departments, P1 and P2, and only one service department, S1. The company is able to track overhead to the various departments but wants to allocate the service department costs to the producing departments. However, the company is not sure which of the multiple allocation bases should be selected. The data it collected appear in the table below. Department P1 P2 51 Overhead Assigned $ 159,000 263,500 80,000 Potential allocation base Employee headcount Space used (in square feet), Productive capacity (in units) 3-year average percentage of $1 output used P1 a. Using employee headcount as the allocation base. b. Using occupied space as the allocation base. c. Using productive capacity as the allocation base. d. Using the 3-year average use as the allocation base. 60 4,900 58,950 60% P2 20 9,100 72,050 40% Required: 1. Determine the total estimated overhead cost for each of the producing departments after allocating the cost of the service department:
Transcribed Image Text:Great Ape Glassworks manufactures glass used for the screens on smartphones. It has two producing departments, P1 and P2, and only one service department, S1. The company is able to track overhead to the various departments but wants to allocate the service department costs to the producing departments. However, the company is not sure which of the multiple allocation bases should be selected. The data it collected appear in the table below. Department P1 P2 51 Overhead Assigned $ 159,000 263,500 80,000 Potential allocation base Employee headcount Space used (in square feet), Productive capacity (in units) 3-year average percentage of $1 output used P1 a. Using employee headcount as the allocation base. b. Using occupied space as the allocation base. c. Using productive capacity as the allocation base. d. Using the 3-year average use as the allocation base. 60 4,900 58,950 60% P2 20 9,100 72,050 40% Required: 1. Determine the total estimated overhead cost for each of the producing departments after allocating the cost of the service department:
Potential allocation base Employee headcount Space used (in square feet) Productive capacity (in units) 3-year average percentage of 51 output used b. Using occupied space as the allocation base. c. Using productive capacity as the allocation base. d. Using the 3-year average use as the allocation base. a Using employee headcount as the allocation base b. Using occupied space as the allocation base c. Using productive capacity as the allocation base d. Using the 3-year average use as the allocation base Prev Required: 1. Determine the total estimated overhead cost for each of the producing departments after allocating the cost of the service department: a. Using employee headcount as the allocation base. $ $ $ $ P1 P1 60 4,900 58,950 60% 1 of 1 21,500 $ 21,500 $ 38,700 $ 51,600 $ P2 20 9,100 72,050 40% P2 21,500 $ 64,500 $ 47,300 $ 34,400 $ Next > Total 43,000 86,000 86,000 86,000
Transcribed Image Text:Potential allocation base Employee headcount Space used (in square feet) Productive capacity (in units) 3-year average percentage of 51 output used b. Using occupied space as the allocation base. c. Using productive capacity as the allocation base. d. Using the 3-year average use as the allocation base. a Using employee headcount as the allocation base b. Using occupied space as the allocation base c. Using productive capacity as the allocation base d. Using the 3-year average use as the allocation base Prev Required: 1. Determine the total estimated overhead cost for each of the producing departments after allocating the cost of the service department: a. Using employee headcount as the allocation base. $ $ $ $ P1 P1 60 4,900 58,950 60% 1 of 1 21,500 $ 21,500 $ 38,700 $ 51,600 $ P2 20 9,100 72,050 40% P2 21,500 $ 64,500 $ 47,300 $ 34,400 $ Next > Total 43,000 86,000 86,000 86,000
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