Support Department Cost Allocation-Sequential Method Back Mountain Sports, Inc., produces skiing and snowboarding gear. The company's main production departments are Molding and Finishing. Production of the skiing and snowboarding gear cannot be accomplished without the supporting tasks of Materials Management and meals for production employees provided by the Cafeteria. Cafeteria costs are always higher than Materials Management costs. The company believes that the number of employees in each department is the best driver of Cafeteria costs. The number of employees in each department is as follows: Molding Department Finishing Department 30 25 Materials Management Department 5 Cafeteria Department The company also believes that the value of support materials used in each department is the best driver for Materials Management costs. The support materials used in the Molding and Finishing departments are valued at $1,900 and $3,100, respectively. Using the sequential method for support department cost allocation (allocating Cafeteria costs first): a. Determine the percentage of Cafeteria costs that should be allocated to the Molding Department. % b. Determine the percentage of Materials Management costs that should be allocated to the Finishing Department. %
Support Department Cost Allocation-Sequential Method Back Mountain Sports, Inc., produces skiing and snowboarding gear. The company's main production departments are Molding and Finishing. Production of the skiing and snowboarding gear cannot be accomplished without the supporting tasks of Materials Management and meals for production employees provided by the Cafeteria. Cafeteria costs are always higher than Materials Management costs. The company believes that the number of employees in each department is the best driver of Cafeteria costs. The number of employees in each department is as follows: Molding Department Finishing Department 30 25 Materials Management Department 5 Cafeteria Department The company also believes that the value of support materials used in each department is the best driver for Materials Management costs. The support materials used in the Molding and Finishing departments are valued at $1,900 and $3,100, respectively. Using the sequential method for support department cost allocation (allocating Cafeteria costs first): a. Determine the percentage of Cafeteria costs that should be allocated to the Molding Department. % b. Determine the percentage of Materials Management costs that should be allocated to the Finishing Department. %
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Support Department Cost Allocation-Sequential Method
Back Mountain Sports, Inc., produces skiing and snowboarding gear. The company's main production departments are Molding and Finishing. Production of
the skiing and snowboarding gear cannot be accomplished without the supporting tasks of Materials Management and meals for production employees
provided by the Cafeteria. Cafeteria costs are always higher than Materials Management costs. The company believes that the number of employees in
each department is the best driver of Cafeteria costs. The number of employees in each department is as follows:
Molding Department
Finishing Department
30
25
Materials Management Department
5
Cafeteria Department
The company also believes that the value of support materials used in each department is the best driver for Materials Management costs. The support
materials used in the Molding and Finishing departments are valued at $1,900 and $3,100, respectively. Using the sequential method for support
department cost allocation (allocating Cafeteria costs first):
a. Determine the percentage of Cafeteria costs that should be allocated to the Molding Department.
%
b. Determine the percentage of Materials Management costs that should be allocated to the Finishing Department.
%
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