Davis snowflake and co Support department cost allocation-reciprocal services methodDavis Snowflake & Co. produces Christmas stockings in its Cutting and Sewing departments. The Maintenance and Security departments support theproduction of the stockings. Costs from the Maintenance Department are allocated based on machine hours, and costs from the Security Department areallocated based on asset value. Information about each department is provided in the following table:Machine hoursAsset valueMaintenanceDepartment800$2,000$36,000FeedbackSecurityDepartment2,000$1,670$16,000CuttingDepartmentProduction departments' total costs $ 63,436 XCuttingDepartment7,200$2,500$64,000Department costDetermine the total cost of each production department after allocating all support department costs to the production departments using the reciprocalservices method.SewingDepartment$ 96,299.2 XSewingDepartment10,800$5,500$82,000Check My WorkThe reciprocal services method considers all inter-support-department service, and thus is the most accurate of the three support departmentallocation methods. The proportional usage of each support department's cost driver by the other departments to which its costs are to beallocated must be determined. Then, the support department costs are allocated simultaneously among the departments.

Under reciprocal method, costs of service departments are allocated to production departments as…

Support department cost allocation-reciprocal services method Davis Snowflake & Co. produces Christmas stockings in its Cutting and Sewing departments. The Maintenance and Security departments support the production of the stockings. Costs from the Maintenance Department are allocated based on machine hours, and costs from the Security Department are allocated based on asset value. Information about each department is provided in the following table: Machine hours Asset value Maintenance Department 800 $2,000 $36,000 Security Department 2,000 $1,670 $16,000 Cutting Cutting Department Sewing 7,200 $2,500 $64,000 Sewing Department Department cost Determine the total cost of each production department after allocating all support department costs to the production departments using the reciprocal services method. 10,800 $5,500 $82,000

Support department cost allocation-reciprocal services method Davis Snowflake & Co. produces Christmas stockings in its Cutting and Sewing departments. The Maintenance and Security departments support the production of the stockings. Costs from the Maintenance Department are allocated based on machine hours, and costs from the Security Department are allocated based on asset value. Information about each department is provided in the following table: Machine hours Asset value Maintenance Department 800 $2,000 $36,000 Security Department 2,000 $1,670 $16,000 Cutting Cutting Department Sewing 7,200 $2,500 $64,000 Sewing Department Department cost Determine the total cost of each production department after allocating all support department costs to the production departments using the reciprocal services method. 10,800 $5,500 $82,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

The cost of printed circuit boards used in the radios * O Product Cost O Period Cost
The cost of telephone servoce for the executive offices * O Product Cost O Period Cost
Physical Units Method, Relative Sales-Value-at-Split-off Method, Net Realizable Value Method, Decision Making Sonimad Sawmill, Inc. (SSI), purchases logs from independent timber contractors and processes them into the following three types of lumber products: Studs for residential construction (e.g., walls and ceilings) Decorative pieces (e.g., fireplace mantels and beams for cathedral ceilings) Posts used as support braces (e.g., mine support braces and braces for exterior fences around ranch properties) These products are the result of a joint sawmill process that involves removing bark from the logs, cutting the logs into a workable size (ranging from 8 to 16 feet in length), and then cutting the individual products from the logs, depending upon the type of wood (pine, oak, walnut, or maple) and the size (diameter) of the log. The joint process results in the following costs and output of products during a typical month: Joint production costs: Materials (rough timber…
Which of the following statements is true of raw materials? ) a) They are categorized as consumer products. b) They are the goods and services that hold little interest for consumers. (c) Thev include products used in producing other products. © d) Thev are large capital purchases designed for a long productive life.
Which of the following is true about make-to-stockprocesses?A. Make-to-stock processes can be controlled based on the actual oranticipated amount of finished goodsB. Make-to-stock process is used when demand is seasonal and thefirm does not have enoughC. Services by their very nature often use make-to-stockprocesses.D. A and B
The costs listed below are related to a manufacturer of all-natural ice cream. Indicate whether the costs are direct materials (DM), direct labor (DL) or overhead (OH). maintenance on factory building mixing department wages factory maintenance labor
Subject: Cost Accounting
Describe about the Commercial Paper Program.
Match the costs for Oracle in producing computer servers to the appropriate cost types below.A. Raw MaterialsB. Direct LaborC. Overhead CostD. N/A1. Employee Wages for Soldering electronic pieces ________________Why? ________________________________________________________________________________________________________________________________________2. Sales Commissions for Salespersons ________Why? ________________________________________________________________________________________________________________________________________3. Soldering Materials purchased in bulk at the beginning of the year ________Why? ________________________________________________________________________________________________________________________________________4. Motherboards and Processors ________________Why? ________________________________________________________________________________________________________________________________________5. Salaries for the supervisor overseeing the…
Ises A Cost Syste X C Acme Inc. Has The Following Info x C Dog Bone Bakery, Which Bakes D x ment/takeAssignmentMain.do?invoker &takeAssignmentSessionLocator=&inprogress=false еВook Sitka Industries uses a cost system that carries direct materials inventory at a standard cost. The controller has established these standards for one ladder (unit): Standard Standard Standard Quantity Price Cost Direct materials 3 pounds $4.50 per pound $13.50 Direct labor 2.00 hours 12.00 per hour 24.00 Total cost $37.50 Sitka Industries made 3,000 ladders in July and used 8,800 pounds of material to make these units. Sitka Industries bought 15,400 pounds of material in the current period. There was a $250 unfavorable direct materials price variance. Enter all amounts as positive numbers. A. How much in total did Sitka pay for the 15,400 pounds? Amount paid $ 69,550 V B. What is the direct materials quantity variance? Direct materials quantity variance $ 900 V Favorable v C. What is the total direct…
Key Performance Indicators of automibile manufacturing company