Service Cost AllocationHarley Corp. has two service departments, (Admin Support Dept. & It Support Dept.) and two producingdepartments (AgencyLine and BancAssure). Provided below are the relevant data:Service DepartmentsOperating DepartmentsAdminAgency LineBancAssureDirect CostsP150,000P300,000P5,000,000P6,000,000Services by Admin Support40%40%20%Services by IT Support20%70%10%RequirementsPrepare a 3 different complete service cost allocation report with details using the following methods:1. Direct MethodIT Services

Lets understand the basics. In direct method of cost allocation, service departments costs are…

Harley Corp. has two service departments, (Admin Support Dept. & It Support Dept.) and two producing departments (AgencyLine and BancAssure). Provided below are the relevant data: Service Departments Operating Departments Admin IT Services AgencyLine BancAssure Direct Costs P150,000 P300,000 P5,000,000 P6,000,000 Services by Admin Support 40% 40% 20% Services by IT Support 20% 70% 10% Requirements Prepare a 3 different complete service cost allocation report with details using the following methods: 1. Direct Method

Harley Corp. has two service departments, (Admin Support Dept. & It Support Dept.) and two producing departments (AgencyLine and BancAssure). Provided below are the relevant data: Service Departments Operating Departments Admin IT Services AgencyLine BancAssure Direct Costs P150,000 P300,000 P5,000,000 P6,000,000 Services by Admin Support 40% 40% 20% Services by IT Support 20% 70% 10% Requirements Prepare a 3 different complete service cost allocation report with details using the following methods: 1. Direct Method

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter7: Allocating Costs Of Support Departments And Joint Products

Section: Chapter Questions

Problem 4CE: Refer to Cornerstone Exercise 7.3. Now assume that Valron Company uses the sequential method to...

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The following information is departmental cost allocation with two service departments and two production departments. Department Cost Percentage Service Provided to S1 S2 P1 P2 Service 1 (S1) $ 32,000 0% 25% 30% 45% Service 2 (S2) 23,000 20 0 20 60 Production 1 (P1) 130,000 Production 2 (P2) 180,000 What is the total cost in P1 and P2 and what is the amount of service department cost allocated to P1 and P2 using the step method with S1 going first? The following information relates to a joint production process for three products, with a total joint production cost of $165,000. There are no separable processing costs for any of the three products. Product Sales Value at Split-Off Units at Split-Off 1 $ 181,500 320 2 99,000 960 3 49,500 1,920 $ 330,000 3,200 What percentage of joint cost is allocated to each of the three products using the sales value at split-off method? Do not give answer in image
Required information [The following information applies to the questions displayed below.] The following information is departmental cost allocation with two service departments and two production departments. Department Service 1 (S1) Service 2 (S2) Production 1 (P1) Production 2 (P2) Cost $ 47,000 37,000 270,000 320,000 Percentage Service Provided to S1 0% 20 S2 P1 20% 40% 20 0 P2 40% 60 What is the amount of service department cost allocated to P1 and P2 using the direct method if the cost in P1 is changed from $270,000 to $290,000?
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Required information Skip to question [The following information applies to the questions displayed below.] The following information is departmental cost allocation with two service departments and two production departments. Percentage Service Provided to Department Cost S1 S2 P1 P2 Service 1 (S1) $ 47,000 0 % 20 % 40 % 40 % Service 2 (S2) 37,000 20 0 20 60 Production 1 (P1) 270,000 Production 2 (P2) 320,000 What is the total cost in P1 and P2 after allocation using the direct method?
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Required information SB (Static) The following information is... [The following information applies to the questions displayed below.] The following information is departmental cost allocation with two service departments and two production departments. Percentage Service Provided to Department Service 1 (S1) Service 2 (52) Production 1 (P1) Production 2 (P2) P1 P2 Cost $ 30,000 20,000 100,000 150,000 Total Cost Allocated S1 0% 20 P2 35% 20 60 Brief Exercise 7-14 (Static) If the cost in P1 is changed from... [LO 7-3] What is the amount of service department cost allocated to P1 and P2 using the direct method if the cost in P1 is changed from $100,000 to $120,000? 52 P1 30% 35% 0
The estimated departmental manufacturing for producing departmenta A and Band the estimated costs of service departments C, D, and E (befor any service department allocations) are: Producing Department Service Department P120,000 180,000 P40,000 B D 40,000 E 20,000 The interdependence of the departments is as follows: Services Provided by Department D E Producing A Producing B Service C Service D Service E 30% 40% 50% 40 30 20 20 30 Marketing General office 20 10 100% 100% 100% Compute the final amount of estimated overhead of Service E after reciprocal transfer costs have been calculated algebraically. After computing the total factory overhead of each producing department and what amount of Department E cost is assigned to Marketing Department?
Required information [The following information applies to the questions displayed below.] The following information is departmental cost allocation with two service departments and two production departments. Percentage Service Provided to Department Service 1 (S1) Cost $ 43,000 S1 S2 P1 P2 0% 30% 35% 35% Service 2 (S2) 33,000 25 0 45 30 Production 1 (P1) 230,000 Production 2 (P2) 280,000 What is the amount of service department cost allocated to P1 and P2 using the direct method? Total Cost P1 P2 Allocated
The estimated departmental manufacturing for producing department A and B and the estimated costs of service departments C, D, and E (before any service department allocations) are: Producing Department Service Department A B P120,000 180,000 P40,000 40,000 20,000 D E The interdependence of the departments is as follows: Services Provided by Department Producing A Producing B Service C Service D Service E Marketing General office D E 30% 40% 50% 40 30 20 20 10 20 10 100% 100% 100% Compute the final amount of estimated overhead of Service E after reciprocal transfer costs have been calculated algebraically. After computing the total factory overhead of each producing department and what amount of DepartmentE cost is assigned to Marketing Department?
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Original costs Proportion of Administrative hours used Proportion of Information Systems hours used Proportion of Maintenance hours used (a) Total costs Administrative Institutional $77,000 0.20 Operating Segments 0.10 Support Departments Information Systems Maintenance $110,600 $62,000 0.10 Retail 0.10 0.10 0.10 Operating Segments Institutional Retail $649,000 $351,000 0.45 0.40 Determine the total costs that each operating segment would be accountable for if support costs are allocated using the direct method. (Round interme 0.30 0.35 0.30 0.50
The costs allocated to each cost center are as follows: Q3: Cost Centers/Costs Production Department Service Department Total Cost Y A B Total of Primary Distribution There is a reciprocal relationship between cost centers. X Service Cost center based on the number of workers, Y Service Cost center will be apportioned on the base of 40.000 45.000 55.000 8.000 7.160 155.500 m2. A B X Y Total Number of Workers m2 152 4.500 114 1.350 76 2.700 20 450 38 300 400 9.300 a) Calculate the benefits received from each service department. b) Calculate the X Service Center's total cost subject to re-distribution. c) Calculate the Y Service Center's total cost subject to re-distribution. d) Re-allocate the cost of service cost centers