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The Swifty Company makes wheels and wings for ground transport vehicles and drones. In addition to the key manufacturing departments, Swifty needs two key support services, provided by its Maintenance and IT departments. The Maintenance costs are allocated to other departments based on the square footage of space each department occupies. Th department allocates its costs to other departments based on the amount of time the IT employees spend assisting the other departments. The cost information of all four departments, along with their usage information for both allocation bases, is as fo Initial cost Square feet occupied IT labor hours used (a) Support Departments Maintenance IT $120,000 $87,000 1,300 2,200 900 Operating Departments Wheels Operating Departments Wheels Wings $424,000 $707,000 2,640 2,565 Allocate the support department costs using the direct method to determine the total costs for which each operating depart should be accountable. 6,160 1,935 Wings Totals $1,338,000 12,300 5,400 Total costs

The Swifty Company makes wheels and wings for ground transport vehicles and drones. In addition to the key manufacturing departments, Swifty needs two key support services, provided by its Maintenance and IT departments. The Maintenance costs are allocated to other departments based on the square footage of space each department occupies. Th department allocates its costs to other departments based on the amount of time the IT employees spend assisting the other departments. The cost information of all four departments, along with their usage information for both allocation bases, is as fo Initial cost Square feet occupied IT labor hours used (a) Support Departments Maintenance IT $120,000 $87,000 1,300 2,200 900 Operating Departments Wheels Operating Departments Wheels Wings $424,000 $707,000 2,640 2,565 Allocate the support department costs using the direct method to determine the total costs for which each operating depart should be accountable. 6,160 1,935 Wings Totals $1,338,000 12,300 5,400 Total costs

FINANCIAL ACCOUNTING
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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The Swifty Company makes wheels and wings for ground transport vehicles and drones. In addition to the key manufacturing departments, Swifty needs two key support services, provided by its Maintenance and IT departments. The Maintenance costs are allocated to other departments based on the square footage of space each department occupies. The IT department allocates its costs to other departments based on the amount of time the IT employees spend assisting the other departments. The cost information of all four departments, along with their usage information for both allocation bases, is as follows. Initial cost Square feet occupied IT labor hours used (a) Total Support Departments $ Maintenance $120,000 $87,000 1.300 IT Wheels 2,200 $ 900 Operating Departments Operating Departments Wings $707,000 Wheels $424,000 2.640 2,565 6,160 Allocate the support department costs using the direct method to determine the total costs for which each operating department should be accountable. Wings 1,935 Totals $ $1,338,000 12,300 5,400 Total costs
Transcribed Image Text:The Swifty Company makes wheels and wings for ground transport vehicles and drones. In addition to the key manufacturing departments, Swifty needs two key support services, provided by its Maintenance and IT departments. The Maintenance costs are allocated to other departments based on the square footage of space each department occupies. The IT department allocates its costs to other departments based on the amount of time the IT employees spend assisting the other departments. The cost information of all four departments, along with their usage information for both allocation bases, is as follows. Initial cost Square feet occupied IT labor hours used (a) Total Support Departments $ Maintenance $120,000 $87,000 1.300 IT Wheels 2,200 $ 900 Operating Departments Operating Departments Wings $707,000 Wheels $424,000 2.640 2,565 6,160 Allocate the support department costs using the direct method to determine the total costs for which each operating department should be accountable. Wings 1,935 Totals $ $1,338,000 12,300 5,400 Total costs
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