Sequential (Step) Method of Support Department Cost Allocation Chekov Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly. Direct costs Normal activity: Number of employees Square footage Support Departments Human Resources $150,000 1,500 General Factory $360,000 60 Producing Departments Fabricating Assembly $120,900 $86,000 45 6,000 80 14,000 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 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 six significant digits) for the four departments using the sequential method. If an amount is zero, enter "0". Use

Sequential (Step) Method of Support Department Cost Allocation Chekov Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly. Direct costs Normal activity: Number of employees Square footage Support Departments Human Resources $150,000 1,500 General Factory $360,000 60 Producing Departments Fabricating Assembly $120,900 $86,000 45 6,000 80 14,000 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 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 six significant digits) for the four departments using the sequential method. If an amount is zero, enter "0". Use

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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Renata Company has four departments: Materials, Personnel, Manufacturing, and Packaging. Information follows. Department Square Feet Asset Values Employees Materials 26 30,000 $ 9,300 Personnel 13 12,000 2,480 Manufacturing Packaging 52 66,000 37,820 39 12,000 12,400 Total 130 120,000 $ 62,000 The four departments share the following indirect expenses for supervision, utilities, and insurance according to their allocation bases. Indirect Expense Supervision Utilities Insurance Total Cost $ 82,700 Number of employees Allocation Base 52,000 Square feet occupied 23,500 Asset values $ 158,200 Allocate each of the three indirect expenses to the four departments.
Hochberg Corporation uses an activity-based costing system with the following three activity cost pools: Activity Cost Pool Total Activity Fabrication 30,000 machine-hours Order processing 300 orders Other Not applicable The Other activity cost pool is used to accumulate costs of idle capacity and organization-sustaining costs. The company has provided the following data concerning its costs: Wages and salaries $340,000 Depreciation Occupancy Total 160,000 220,000 $720,000 The distribution of resource consumption across activity cost pools is given below: Activity Cost Pools Fabrication Order Processing Other Total Wages and salaries 30% 60% 10% 100% Depreciation 15% 50% 35% 100% Occupancy 15% 55% 30% 100% The activity rate for the Fabrication activity cost pool is: A) $5.30 per machine-hour B) $3.60 per machine-hour C) $7.20 per machine-hour D) $4.80 per machine-hour
Octogon, Inc. has three operating departments: Cutting, Assembling, and Finishing. The data below are provided for the current year: Assembling Dept # workers 4,000 Cutting Dept Finishing Dept 5,000 1,000 Square ft occupied 15,000 sq ft 12,000 sq ft 23,000 sq ft Total Maintenance costs of $220,000 are allocated to each department based on the number of square feet. Determine the Maintenance costs to be allocated to each department. Check figure: Finishing Dept $101,200
Support Department Cost Allocation-Direct Method Charlie's Wood Works produces wood products (e.g., cabinets, tables, picture frames, and so on). Production departments include Cutting and Assembly. The Janitori and Security departments support the Cutting and Assembly departments. The Assembly Department spans about 50,400 square feet and holds assets valued at abo $88,000. The Cutting Department spans about 33,600 square feet and holds assets valued at about $132,000. Charlie's Wood Works allocates support department ce using the direct method. If costs from the Janitorial Department are allocated Based on square feet and costs from the Security Department are allocated based on a value. a. Determine the percentage of Janitorial costs that should be allocated to the Assembly Department. % b. Determine the percentage of Security costs that should be allocated to the Cutting Department.
Support department cost allocation-direct 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: Support Department Janitorial Department Cafeteria Department Cost Driver Square footage to be serviced Number of employees Janitorial Department $300,000 Janitorial Department cost allocation Cafeteria Department cost allocation Cafeteria Department $170,000 4,700 2 44 8 Department costs Square feet Number of employees Allocate the support department costs to the production departments using the direct method. Cutting Department LA Cutting Department $1,500,000 2,400 21 $ Assembly Department SA Assembly Department $680,000 3,600 9 S < 11:15 PM 2/25/2024
During the past month, the following costs were incurred in the three production departments and two service departments of Kim & Co.: Supplying Department Administration Factory support Direct cost From: Service department costs Administration Factory support Total allocations Administration Direct costs Total costs 0.10 $ 640,000 Using Department Factory Support Fabrication 0.40 0.30 0.20 $1,720,000 $1,330,000 Required: Allocate service department costs to Fabrication, Assembly, and Finishing using the reciprocal method, and determine the total costs of Fabrication, Assembly, and Finishing after this allocation. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your final answers to the nearest whole dollar amounts.) Assembly 0.20 0.20 $284,000 Administration Factory Support Finishing 0.10 0.50 $254,000 Cost Allocation To: Fabrication Assembly Finishing
Rabia Company has two support departments, Human Resources and Maintenance, and two producing departments, Fabrication and Assembly Support Departments Producing Departments Human Resources Maintenance Fabrication Assembly Budgeted overhead Direct labor hours Machine hours Number of employees $40,000 $72,000 $140,000 $160,000 2,000 2,500 8,000 10,000 12,000 8,000 4 5 15 25 The company only had mixed cost. Human Resource costs are allocated based on the number of employees, and maintenance costs are allocated based on machine hours. Predetermined overhead rates for fabrication and assembly are based on direct labor hours. Required: 1. Calculate the allocation ratios. 2. Using the direct method, allocate the costs of the Human Resources and Maintenance deportments to the Fabrication and Assembly departments. Also write the final cost of both the production departments. 3. What if the Maintenance Department had 50 employees? How would that affect the allocation of Human Resources…
The Hsu Manufacturing Company has two service departments: Maintenance and Accounting. The Maintenance Department's costs of $489,600 are allocated on the basis of machine hours. The Accounting Department's costs of $122,400 are allocated on the basis of the number of employees within a specific department. The direct departmental costs for A and B are $210,000 and $410,000, respectively. Maintenance Accounting A B Machine hours 895 80 2,400 320 Number of employees 2 2 8 4 What is the Maintenance Department's cost allocated to Department A using the direct method? Note: Do not round intermediate calculations.
Computing departmental overhead allocation rates The Oakman Company (see Short Exercise S19-1) has refined its allocation system by separating manufacturing overhead costs into two cost pools—one for each department. The estimated costs for the Mixing Department, $510,000, will be allocated based on direct labor hours, and the estimated direct labor hours for the year are 170,000. The estimated costs for the Packaging Department, $300,000, will be allocated based on machine-hours, and the estimated machine hours for the year are 40,000. In October, the company incurred 38,000 direct labor hours in the Mixing Department and 10,000 machine hours in the Packaging Department. Requirements Compute the predetermined overhead allocation rates. Round to two decimal places. Determine the total amount of overhead allocated in October.