The estimated departmental manufacturing for producing departmentaA and Band the estimated costs of service departments C, D, and E (beforany service department allocations) are:Producing DepartmentService DepartmentP120,000180,000P40,000BD40,000E20,000The interdependence of the departments is as follows:Services Provided byDepartmentDEProducing AProducing BService CService DService E30%40%50%4030202030MarketingGeneral office2010100%100%100%Compute the final amount of estimated overhead of Service E after reciprocal transfer costshave been calculated algebraically.After computing the total factory overhead of each producing department and what amount ofDepartment E cost is assigned to Marketing Department?

First we will alloate producing dept A and B's cost to service dept C, D & E. Thus we will get…

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Business

Accounting

mervice

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter5: Support Department And Joint Cost Allocation

Section: Chapter Questions

Problem 1PB: Support department cost allocation Hooligan Adventure Supply produces and sells various outdoor...

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Karen Co. has four departments: Materials, Personnel, Manufacturing, and Packaging. In a recent month, the four departments incurred three shared indirect expenses. The amounts of these indirect expenses and the bases used to allocate them follow. Indirect Expense Cost Allocation Base Supervision Utilities $ 82,000 Number of employees 59,000 Square feet occupied 27,000 Value of assets in use Insurance Total $168,000 Departmental data for the company's recent reporting period follow. Department Materials Employees Square Feet 66,500 9,500 95,000 19,000 Asset Values 58 $10,350 4,140 38,640 15,870 Personnel 8 Manufacturing Packaging 70 64 Total 200 190,000 $69,000 1. Use this information to allocate each of the three indirect expenses across the four departments. 2. Prepare a summary table that reports the indirect expenses assigned to each of the four departments. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Use this information to allocate…
Hh1. Account
The step-down allocation method: a. recognizes the total amount of services that support departments provide to each other b. allocates complete reciprocated costs c. typically begins with the support department that provides the highest percentage of its total services to other support departments d. offers key input for outsourcing decisions
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 Service Department Cost Allocation Total Cost Percentage Service Provided to P1 S1 0% 20 S2 20% 0 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? P1 40% 20 P2 P2 40% 60
Please answer po
D1. Account
(Appendix 4B) The method that assigns support department costs only to producing departments in proportion to each departments usage of the service is known as a. the sequential method. b. the proportional method. c. the reciprocal method. d. the direct method. e. None of these.
Support department cost allocation Hooligan Adventure Supply produces and sells various outdoor equipment. The Molding and Assembly production departments are supported by the Personnel and Maintenance departments. Personnel costs are allocated to the production departments based on the number of employees, and Maintenance costs are allocated based on number of service calls. Information about these departments is detailed in the following table: Instructions 1. Assuming that Hooligan Adventure Supply uses the sequential method to allocate its support department costs, which support department does it most likely allocate first? 2. Based on your response in part (1), determine the total costs allocated from each support department to each production department using the sequential method. 3. If Hooligan Adventure Supply wanted to use a more accurate support department cost allocation method, which method should it choose? What might discourage the company from using this method?
Support department cost allocation comparison Refer to your answers to Exercises 7-9. Compare the total support department costs allocated to each production department under each cost allocation method. Which production department isallocated the most support department costs (a) under the direct method, (b) under the sequentialmethod, and (c) under the reciprocal services method? EX 19-7 Support department cost allocationdirect method Becker Tabletops has two support departments (Janitorial and Cafeteria) and two production departments (Cutting and Assembly). Relevant details for these departments are as follows: Allocate the support department costs to the production departments using the direct method. EX 19-8 Support department cost allocationsequential method Refer to the information provided for Becker Tabletops in Exercise 7. Allocate the support department costs to the production departments using the sequential method. Allocate the support department with the highest department cost first. EX 19-9 Support department cost allocation reciprocal services method Refer to the information provided for Becker Tabletops in Exercise 7. Allocate the support department costs to the production departments using the reciprocal services method.
FIFO Method, Two-Department Analysis Refer to the data in Problem 6.38. Required: Prepare a production report for each department using the FIFO method.
Refer to Cornerstone Exercise 7.3. Now assume that Valron Company uses the sequential method to allocate support department costs. The support departments are ranked in order of highest cost to lowest cost. Required: 1. Calculate the allocation ratios (rounded to four significant digits) for the four departments using the sequential method. 2. Using the sequential method, allocate the costs of the Human Resources and General Factory departments to the Fabricating and Assembly departments. (Round all allocated costs to the nearest dollar.) 3. What if the allocation ratios in Requirement 1 were rounded to six significant digits rather than four? How would that affect any rounding error in the allocation of costs?
Question A6 In a process to calculate full cost for a product or service, what is the correct order of the following steps? A Apportion general overheads between departments Allocate specific departmental overheads to the relevant department Apportion service department costs to production cost centres Total product department overheads B Allocate specific departmental overheads to the relevant department Apportion general overheads between departments Total product department overheads Apportion service department costs to production cost centres C Allocate specific departmental overheads to the relevant department Apportion general overheads between departments Apportion service department costs to production cost centres Total product department overheads D Allocate specific departmental overheads to the relevant department Apportion service department costs to production cost centres Apportion general overheads between departments Total product department overheads