Quillen Company manufactures a product in a factory thathas two production departments, Cutting and Sewing, andtwo support departments, S1 and S2. The activity driver forS1 is number of employees, and the activity driver for S2 isnumber of maintenance hours. The following data pertainto Quillen:Direct costsNormal activity:Number ofemployeesMaintenancehours1SupportDepartments2S1S2Cutting$180 000 $150 000 $122 0001 200ProductionDepartments306316 000Sewing$90 500147Refer to the information for Quillen Company above. Nowassume that Quillen uses the sequential method to allocatesupport department costs. S1 is allocated first, then S2.Required:4 000Calculate the cost assignment ratios to be used underthe sequential method for S2, Cutting and Sewing.Carry out your answers to four decimal places.Allocate the overhead costs to the productiondepartments by using the sequential method.

Cost allocation is one of the processes in cost management which includes the identification of…

Required: 1 2 Calculate the cost assignment ratios to be used under the sequential method for S2, Cutting and Sewing. Carry out your answers to four decimal places. Allocate the overhead costs to the production departments by using the sequential method.

Required: 1 2 Calculate the cost assignment ratios to be used under the sequential method for S2, Cutting and Sewing. Carry out your answers to four decimal places. Allocate the overhead costs to the production departments by using the sequential method.

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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Question

Quillen Company manufactures a product in a factory that
has two production departments, Cutting and Sewing, and
two support departments, S1 and S2. The activity driver for
S1 is number of employees, and the activity driver for S2 is
number of maintenance hours. The following data pertain
to Quillen:
Direct costs
Normal activity:
Number of
employees
Maintenance
hours
1
Support
Departments
2
S1
S2
Cutting
$180 000 $150 000 $122 000
1 200
Production
Departments
30
63
16 000
Sewing
$90 500
147
Refer to the information for Quillen Company above. Now
assume that Quillen uses the sequential method to allocate
support department costs. S1 is allocated first, then S2.
Required:
4 000
Calculate the cost assignment ratios to be used under
the sequential method for S2, Cutting and Sewing.
Carry out your answers to four decimal places.
Allocate the overhead costs to the production
departments by using the sequential method.

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