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 $1 Overhead Assigned $ 175,500 288,250 91,000 Potential allocation base Employee headcount Space used (in square feet) Productive capacity (in units) 3-year average percentage of S1 output used Part 1 (Algo) 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. 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 P1 P1 60 3,900 56,800 60% Required: 1. Determine the total estimated overhead cost for each of the producing departments after allocating the cost of the service department: P2 P2 20 9,100 85,200 40% Total

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Concept explainers

Question

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.

Cost Allocation in Service Indu X +
ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launch Url=https%253A %252F%252Fbb.tulsacc.edu%252Fw...
- CH 07 i
2
I
Book
1
ferences
Mic
Mc
Graw
Hill
BE
X
M Question 2-QUIZ - CH 07-C X
2
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.
Part 1 (Algo)
S
Department
W
P1
P2
S1
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.
Potential allocation base
Employee headcount
Space used (in square feet)
Productive capacity (in units)
3-year average percentage of S1 output used
X
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
Overhead
Assigned
$ 175,500
288,250
91,000
#3
20
E
D
$4
C
888
I
R
F
%
5
V
T
< Prev
G
P1
6
Saved
P1
60
3,900
56,800
60%
B
2 of 6
MacBook Pro
Y
+
P2
A
&
H
M
7
P2
20
9,100
85,200
40%
Next >
U
Total
N
➤11
*CO
8
J
1
(
9
M
K
O
-O
V
4
Help
P
D
Save
A

Expert Solution

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

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