Operating Department C Service Department A B 1 2 Total Overhead costs Number of employees Square feet of space occupied Hours of press time £100,000 £93,100 £62,100 £237,200 £257,400 £749,800 160 55 40 360 240 855 12,900 7,500 19,000 38,000 30,000 95,000 60,000 172,400 90,000 The company allocates service department costs by the direct method in the following order: A (number of employees), B (space occupied), and C (hours of press time). The company makes no distinction between variable and fixed service department costs. Required: How much overhead cost would be allocated to each operating department? (Do not round intermediate calculations. Amounts to be deducted should be indicated with a minus sign.) Service Departments Operating Departments Total Overhead costs Allocation: Department A: Department B: Department C: Total overhead costs after allocations

Operating Department C Service Department A B 1 2 Total Overhead costs Number of employees Square feet of space occupied Hours of press time £100,000 £93,100 £62,100 £237,200 £257,400 £749,800 160 55 40 360 240 855 12,900 7,500 19,000 38,000 30,000 95,000 60,000 172,400 90,000 The company allocates service department costs by the direct method in the following order: A (number of employees), B (space occupied), and C (hours of press time). The company makes no distinction between variable and fixed service department costs. Required: How much overhead cost would be allocated to each operating department? (Do not round intermediate calculations. Amounts to be deducted should be indicated with a minus sign.) Service Departments Operating Departments Total Overhead costs Allocation: Department A: Department B: Department C: Total overhead costs after allocations

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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EXERCISE 1 LP Corporation uses an activity-based costing system with the following three activity cost pools: Total Activity Activity Cost Pool Fabrication 80,000 machine-hours 400 orders Order processing Other Not applicable The Other activity cost pool is used to accumulate costs of idle capacity and facility-sustaining costs. The company has provided the following data concerning its costs: Wages and salaries Depreciation P460,000 180,000 200,000 P840,000 Occupancy Total The distribution of resource consumptions across activity cost pools is given below: Activity Cost Pools Order Fabrication Other Total Processing Wages and salaries 5% 80% 15% 100% Depreciation 15% 40% 45% 100% Occupancy 15% 50% 35% 100% Required: 1. Determine the activity rate for the Fabrication activity cost pool. 2. Determine the activity rate for the Order Processing activity cost pool. ersity
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Answer question D
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