201. Togan Products has two production departments-assembly and finishing. These are supported by two service departments-sourcing(purchasing and handling of materials and human resources) and operations (work scheduling, supervision, and inspection). Logan hasthe following labor hours devoted by each of the service departments to the other departments.SourcingOperationsSourcing10,000The costs incurred in the plant are as follows:DepartmentsSourcingOperationsAssemblyFinishingTotalTotal Labor Hours Used by DepartmentsAssembly40,00060,000a. Direct MethodAssemblyFinishingb. Step MethodAssemblyFinishingcReciprocal MethodAssemblyOperations20,000DepartmentalCosts$ 174,000220,000416,000261,000$1,071,000Required:1. What are the costs allocated to the two production departments using (a) the direct method, (b) the step method, when the sourcingdepartment that provides the greatest percentage of services to other service departmerits goes first, and (c) the reciprocal method?2. What are the total costs in the production departments after allocation?(For all requirements, do not round intermediate calculations. Round your final answers to nearest whole dollar amount.)Total ServiceDepartment CostAllocatedFinishing60,00050,000Total ProductionCost

Indirect costs incurred while producing goods or services. Overhead costs cannot be directly…

Togan Products has two production departments-assembly and finishing. These are supported by two service departments-sour (purchasing and handling of materials and human resources) and operations (work scheduling, supervision, and inspection). Logan the following labor hours devoted by each of the service departments to the other departments. I Total Labor Hours Used by Departments Operations 20,000 Assembly 40,000 60,000 Sourcing Sourcing Operations 10,000 The costs incurred in the plant are as follows: Departments Sourcing Operations Assembly Finishing Total Departmental Costs $ 174,000 220,000 416,000 261,000 $1,071,000 Finishing 60,000 50,000 Required: 1. What are the costs allocated to the two production departments using (a) the direct method, (b) the step method, when the sourcings department that provides the greatest percentage of services to other service departments goes first, and (c) the reciprocal method? 2. What are the total costs in the production departments after allocation? (For all requirements, do not round intermediate calculations. Round your final answers to nearest whole dollar amount.)

Togan Products has two production departments-assembly and finishing. These are supported by two service departments-sour (purchasing and handling of materials and human resources) and operations (work scheduling, supervision, and inspection). Logan the following labor hours devoted by each of the service departments to the other departments. I Total Labor Hours Used by Departments Operations 20,000 Assembly 40,000 60,000 Sourcing Sourcing Operations 10,000 The costs incurred in the plant are as follows: Departments Sourcing Operations Assembly Finishing Total Departmental Costs $ 174,000 220,000 416,000 261,000 $1,071,000 Finishing 60,000 50,000 Required: 1. What are the costs allocated to the two production departments using (a) the direct method, (b) the step method, when the sourcings department that provides the greatest percentage of services to other service departments goes first, and (c) the reciprocal method? 2. What are the total costs in the production departments after allocation? (For all requirements, do not round intermediate calculations. Round your final answers to nearest whole dollar amount.)

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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