The following information is departmental cost allocation with two service departments and two production departments. Percentage Service Provided to Department Service 1 (S1) Service 2 (S2) Cost $ 43,000 S1 S2 P1 P2 0% 30% 35% 35% 33,000 25 0 45 30 Production 1 (P1) 230,000 Production 2 (P2) 280,000 What is the amount of service department cost allocated to P1 and P2 using the direct method? P1 P2 2 Total Cost Allocated

The following information is departmental cost allocation with two service departments and two production departments. Percentage Service Provided to Department Service 1 (S1) Service 2 (S2) Cost $ 43,000 S1 S2 P1 P2 0% 30% 35% 35% 33,000 25 0 45 30 Production 1 (P1) 230,000 Production 2 (P2) 280,000 What is the amount of service department cost allocated to P1 and P2 using the direct method? P1 P2 2 Total Cost Allocated

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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Reciprocal 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 Human Resources 1,500 General Factory Human Resources General Factory $330,000 0 60 ✓ Producing Departments 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 reciprocal method to allocate support department costs. Fabricating Assembly $114,800 $95,000 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 General Factory 45 X…
4 Memorial Services, Incorporated (MSI) has three service departments (IT, Accounting, and HR) and two production departments (West and East). The usage data for each of the service departments for the previous period follow: IT Accounting HR IT -- Service department costs IT allocation Accounting allocation HR allocation Total costs allocated 0% 10% Accounting HR 0% 20% 0% -- 10% $ -- The direct costs of the service departments in the previous period were $91,000 for IT, $116,000 for Accounting, and $155,000 for HR. IT West 40% 40% 60% Required: Use the direct method to allocate the service department costs to the production departments. Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations. East 40% 60% 20% Accounting 0 $ 0 $ Check my work HR 0 $ West 0 $ East 0
Woodstock Binding has two service departments, IT (Information Technology) and HR (Human Resources), and two operating departments, Publishing and Binding. Management has decided to allocate IT costs on the basis of IT Tickets (issued with each IT request) in each department and HR costs on the basis of employees in each department. The following data appear in the company records for the current period: IT tickets Employees Department direct costs a. The order of allocation starts with IT. b. The order of allocation starts with HR. IT Required A HR 1,200 0 0 16 $ 152,000 $ 249,600 Required: Use the step method to allocate the service costs, using the following: Required B Publishing 1,200 24 $430,000 Complete this question by entering your answers in the tabs below. X Answer is not complete. Use the step method to allocate the service costs, using the following: Binding Return to question 3,600 40 $ 390,000
Cost Department Allocations In divisional income statements prepared for Demopolis Company, the Payroll Department costs are charged back to user divisions on the basis of the number of payroll distributions, and the Purchasing Department costs are charged back on the basis of the number of purchase requisitions. The Payroll Department had expenses of $29,792, and the Purchasing Department had expenses of $15,370 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: Residential Commercial Government Contract Sales $ 321,000 $ 426,000 $ 978,000 Number of employees: Weekly payroll (52 weeks per year) 120 70 75 Monthly payroll 28 39 26 Number of purchase requisitions per year 2,200 1,600 1,500 Required: a. Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division. Residential Commercial Government Contract Total Number of payroll checks:…
(Appendix 4B) Sequential Method of Support Department Cost Allocation Stevenson Company is divided into two operating divisions: Battery and Small Motors. The company allocates power and general factory costs to each operating division using the sequential method. General Factory is allocated first in the sequential method for the company. Support department cost allocations using the sequential method are based on the following data: Support Departments Operating Divisions Overhead costs Machine hours Square footage Direct labor hours Required: Power Allocation ratios for General Factory Battery Power Small Motors $160,000 Allocation ratios for Power 2,000 1,000 General Factory $430,000 1. Calculate the allocation ratios for Power and General Factory. (Note: Carry these calculations out to four decimal places.) 2,000 1,500 Battery $163,000 7,000 7,500 18,000 Small Motors $84,600 1,500 20,000 60,000
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