Q.3.2 Puppy Manufacturers is a dog clothing company with four departments - small clothing, large clothing, administrative services and facilities services. The first two departments are the primary production departments and the latter two departments exist to provide services to the production departments. Top management has decided that, for internal reporting purposes, the cost of service department operations should be reassigned to the production departments. Administrative service costs are reassigned on the basis of the number of employees and facilities services costs are reassigned based on the amount of floor metreage occupied. The service departments provide services to both production departments as well as each other. Data pertaining to the reassignments for February 2019 are as follows: Department Direct Nr of Square metreage departmental costs employees occupied Small clothing (SC) R350 000 175 Large clothing (LC) R300 000 125 Administrative R100 000 25 services Facilities R50 000 5 Total R800 000 30 330 Required: Determine the total amount of costs to be allocated to each of the production departments under the direct method. Round all answers to the nearest Rand value. 15 10 4 1

Q.3.2 Puppy Manufacturers is a dog clothing company with four departments - small clothing, large clothing, administrative services and facilities services. The first two departments are the primary production departments and the latter two departments exist to provide services to the production departments. Top management has decided that, for internal reporting purposes, the cost of service department operations should be reassigned to the production departments. Administrative service costs are reassigned on the basis of the number of employees and facilities services costs are reassigned based on the amount of floor metreage occupied. The service departments provide services to both production departments as well as each other. Data pertaining to the reassignments for February 2019 are as follows: Department Direct Nr of Square metreage departmental costs employees occupied Small clothing (SC) R350 000 175 Large clothing (LC) R300 000 125 Administrative R100 000 25 services Facilities R50 000 5 Total R800 000 30 330 Required: Determine the total amount of costs to be allocated to each of the production departments under the direct method. Round all answers to the nearest Rand value. 15 10 4 1

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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