Logan Products has two production departments-assembly and finishing. These are supported by two service departments-sourc (purchasing and handling of materials and human resources) and operations (work scheduling, supervision, and inspection). Logan H the following labor hours devoted by each of the service departments to the other departments. Total Labor Hours Used by Departments Sourcing Sourcing Operations Operations 20,000 Assembly 10,000 40,000 60,000 The costs incurred in the plant are as follows: Departments Sourcing Departmental Costs $ 204,000 270,000 436,000 281,000 $ 1,191,000 Operations Assembly Finishing Total Required: Finishing 60,000 50,000 1. What are the costs allocated to the two production departments using (a) the direct method, (b) the step method, when the sourcin department that provides the greatest percentage of services to other service departments goes first, and (c) the reciprocal method 2. What are the total costs in the production departments after allocation? (For all requirements, do not round intermediate calculations. Round your final answers to nearest whole dollar amount.)
Logan Products has two production departments-assembly and finishing. These are supported by two service departments-sourc (purchasing and handling of materials and human resources) and operations (work scheduling, supervision, and inspection). Logan H the following labor hours devoted by each of the service departments to the other departments. Total Labor Hours Used by Departments Sourcing Sourcing Operations Operations 20,000 Assembly 10,000 40,000 60,000 The costs incurred in the plant are as follows: Departments Sourcing Departmental Costs $ 204,000 270,000 436,000 281,000 $ 1,191,000 Operations Assembly Finishing Total Required: Finishing 60,000 50,000 1. What are the costs allocated to the two production departments using (a) the direct method, (b) the step method, when the sourcin department that provides the greatest percentage of services to other service departments goes first, and (c) the reciprocal method 2. What are the total costs in the production departments after allocation? (For all requirements, do not round intermediate calculations. Round your final answers to nearest whole dollar amount.)
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter4: Accounting For Factory Overhead
Section: Chapter Questions
Problem 9E: A manufacturing company has two service and two production departments. Human Resources and Machine...
Related questions
Question
Denger
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
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.Recommended textbooks for you
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning