Reciprocal Method of Support Department Cost AllocationChekov Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly.Direct costsNormal activity:Number of employeesSquare footageSupport DepartmentsHumanResources$150,000Human Resources1,500General FactoryHuman ResourcesGeneralFactory$330,000060✓Producing Departments14,000)The costs of the Human Resources Department are allocated on the basis of number of employees, and the costs of General Factory are allocated on the basis of square footage.Now assume that Chekov Company uses the reciprocal method to allocate support department costs.Fabricating Assembly$114,800$95,000Required:1. Calculate the allocation ratios (rounded to four significant digits) for the four departments using the reciprocal method. If an amount is zero, enter "0". Use the rounded values for subsequent calculations.Proportion of Driver Used byGeneral Factory45X6,0000 ✓80FabricatingAssembly

Human Resources Allocated to the General Factory, Fabricating, Assembly in the ratio of 60:45:80I.e…

Required: 1. Calculate the allocation ratios (rounded to four significant digits) for the four departments using the reciprocal method. If an amount is zero, enter "0". Use the rounded values for subsequent calculations. Proportion of Driver Used by Human Resources General Factory Human Resources ✓ General Factory ✓ Fabricating Assembly

Required: 1. Calculate the allocation ratios (rounded to four significant digits) for the four departments using the reciprocal method. If an amount is zero, enter "0". Use the rounded values for subsequent calculations. Proportion of Driver Used by Human Resources General Factory Human Resources ✓ General Factory ✓ Fabricating Assembly

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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Quillen Company manufactures a product in a factory that has two producingdepartments, Cutting and Sewing, and two support departments, S1 and S2. The activitydriver for S1 is the number of employees, and the activity driver for S2 is the number ofmaintenance hours. The following data pertain to Quillen:REQUIRED:(a) Calculate the cost assignment ratios to be used under the reciprocal method for S1,S2, Cutting, and Sewing. Carry out your answers to four decimal places.(b) Allocate the overhead costs to the producing departments by using the reciprocalmethod.(c) What methods can managers use to allocate costs of multiple support departmentsto operating departments? Explain the difference between these methods.
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AI Rawabi company consist of two support departments (Administration and R& D) and two operating departments (Manufacturing & Assembling). The cost of Administration department is allocated based on number of employees and the cost of R& D department is allocated based on research hours. The table below shows the cost details. Allocate the cost of the support departments to the operating departments using direct step-dowrtHow much is the Assembling department total cost after cost allocation: Support Departments Operating Departments Admin R&D Manufacturing Assembling Total Cost Cost: Salaries 30000 60000 44000 70000 204000 Supplies 10000 30000 25000 30000 95000 Total 40000 90000 69000 100000 299000 Allocation Base: Research Hours 200 300 450 250 Number of Employees 7 10 9. 13 Select one: O a. RO 155775 O b. 162090.3 O c. RO 143225 O d. RO 136909.7
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i.3
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