Support department cost allocation-direct methodBecker Tabletops has two support departments (Janitorial and Cafeteria) and two production departments (Cutting and Assembly). Relevant details for these departmentsare as follows:Support DepartmentJanitorial DepartmentCafeteria DepartmentCost DriverSquare footage to be servicedNumber of employeesJanitorialDepartment$320,000Janitorial Department cost allocationCafeteria Department cost allocationCafeteriaDepartment$170,0004,50034410Department costsSquare feetNumber of employeesAllocate the support department costs to the production departments using the direct method.CuttingDepartment$CuttingDepartment$1,510,000$70027AssemblyDepartment$680,0006,3003AssemblyDepartment

COST ALLOCATIONWhen items of cost are identifiable directly with some products or departments such…

upport department cost allocation-direct method ecker Tabletops has two support departments (Janitorial and Cafeteria) and two production departments (Cutting and Assembly). Relevant details for these departments re as follows: Support Department anitorial Department Cafeteria Department Cost Driver Square footage to be serviced Number of employees Janitorial Department $320,000 anitorial Department cost allocation Cafeteria Department cost allocation Cafeteria Department $170,000 4,500 3 44 10 epartment costs quare feet umber of employees llocate the support department costs to the production departments using the direct method. Cutting Department Cutting Department $1,510,000 $ 700 27 Assembly Department $680,000 6,300 3 Assembly Department

upport department cost allocation-direct method ecker Tabletops has two support departments (Janitorial and Cafeteria) and two production departments (Cutting and Assembly). Relevant details for these departments re as follows: Support Department anitorial Department Cafeteria Department Cost Driver Square footage to be serviced Number of employees Janitorial Department $320,000 anitorial Department cost allocation Cafeteria Department cost allocation Cafeteria Department $170,000 4,500 3 44 10 epartment costs quare feet umber of employees llocate the support department costs to the production departments using the direct method. Cutting Department Cutting Department $1,510,000 $ 700 27 Assembly Department $680,000 6,300 3 Assembly Department

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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3 manage costs? 10-31. Activity-Based Costing of Customers Rupert's Appliance Warehouse (RAW) delivers appliances to retailers throughout the city. The firm adds 6 percent to the cost of the appliances to cover the delivery cost. The delivery fee is meant to cover the cost of delivery. The finance team at RAW has analyzed the delivery service using activity-based costing methods and identified four activities. Data on these activities follow: 100 Activity Processing order.. Loading truck... Delivering order..... Billing..... Total overhead. .. Cost Driver Number of orders Number of items Number of orders Number of invoices Order value (total) . . . . . Number of orders.. Total number of items. Number of invoices. Activity Cost $ 90,000 180,000 108,000 70,000 $448,000 Two of Rupert's customers are McLean Designs and Neveux Appliances. Data for orders and deliveries to these two customers follow: .. Cost Driver Volume 3,000 orders 60,000 items 3,000 orders 2,500 invoices McLean Designs…
Assume a company provided the following information: Departmental costs Number of employees Square feet of space occupied Multiple Choice If the company (1) uses the direct method to allocate service department costs to operating departments, (2) allocates Cafeteria costs based on the number of employees, and (3) allocates Janitorial costs based on square feet of space of occupied, then the cost allocated from the Cafeteria Department to the Lab Department is closest to: C $58,338. $63,467. $76,800. Service Departments Operating Departments Cafeteria Janitorial Lab Tech $232,000 $950,000 32 68 $240,000 $140,000 20 2,000 11,000 9,000 $116,800. 10 3,000
Support department cost allocation Blue Mountain Masterpieces produces pictures, paintings, and other home decor. The Printing and Framing production departments are supported by the Janitorial and Security departments. Janitorial costs are allocated to the production departments based on square feet, and security costs are allocated based on asset value. Information about these departments is detailed in the following table: Square feet Asset value Janitorial Department 760 $900 $5,200 Security Department 1,040 $1,240 $6,600 a. Direct cost allocation. method. b. Sequential cost allocation method. c. Reciprocal cost allocation method. d. None of the above. d X Printing Department 4,230 $12,390 $33,000 Framing Department 4,770 $8,610 $29,000 Department cost Management has experimented with different support department cost allocation methods in the past. The different allocation methods did not yield large differences of cost allocation to the production departments. 1. Determine which…
Q. 2 Índigo manufacturing has five activity cost pools and two products ( a budget tape vacuum and a deluxe tape vacuum). Information is presented below:
Support Department Cost Allocation—Reciprocal Services Method Blue Africa Inc. produces laptops and desktop computers. The company’s production activities mainly occur in what the company calls its Laser and Forming departments. The Cafeteria and Security departments support the company’s production activities and allocate costs based on the number of employees and square feet, respectively. The total cost of the Security Department is $252,000. The total cost of the Cafeteria Department is $778,000. The number of employees and the square footage in each department are as follows: Employees Square Feet Security Department 10 540 Cafeteria Department 26 2,400 Laser Department 40 4,800 Forming Department 50 800 Using the reciprocal services method of support department cost allocation, determine the total costs from the Security Department that should be allocated to the Cafeteria Department and to…
Support Department Cost Allocation—Reciprocal Services Method Blue Africa Inc. produces laptops and desktop computers. The company’s production activities mainly occur in what the company calls its Laser and Forming departments. The Cafeteria and Security departments support the company’s production activities and allocate costs based on the number of employees and square feet, respectively. The total cost of the Security Department is $248,000. The total cost of the Cafeteria Department is $333,000. The number of employees and the square footage in each department are as follows: Employees Square Feet Security Department 10 570 Cafeteria Department 28 2,400 Laser Department 40 2,400 Forming Department 50 3,200 Using the reciprocal services method of support department cost allocation, determine the total costs from the Security Department that should be allocated to the Cafeteria Department and…
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