Use the information below to answer the two questions that follow.A company has two service departments and two operating departments. The company allocates service departmental costs tooperating departments using the direct method. Operating data for these departments for last year are as follows:Service DepartmentdOperating DepartmentCafeteriaCustodialCuttingMoldingDepartmental costs$144,000$84,000$21,200$52,50090Number of employees353060Square feet occupied1,6008002,1001,500Q. What is the total Molding Department cost after allocation under the direct method?ANS. $Q. The company is considering to switch to the step-down method. Unther this method, Cafeteria costs are allocated first on the basisof number of employees and Custodial costs are allocated second on the basis of square feet occupied. What is the total MoldingDepartment cost after allocation under the step-down method?ANS. $

Direct Method: Under direct method, service department costs are allocated to production departments…

Use the information below to answer the two questions that follow. A company has two service departments and two operating departments. The company allocates service departmental costs to Operating departments using the direct method. Operating data for these departments for last year are as follows: Service Departmentd Operating Department Cafeteria Custodial Cutting Molding Departmental costs $144,000 $84,000 $21,200 $52,500 Number of employees 35 30 60 90 Square feet occupied 1,600 800 2,100 1,500 Q. What is the total Molding Department cost after allocation under the direct method? ANS. $ Q. The company is considering to switch to the step-down method. Unther this method, Cafeteria costs are allocated first on the of number of employees and Custodial costs are allocated second on the basis of square feet occupied. What is the total Molding Department cost after allocation under the step-down method? ANS. $

Use the information below to answer the two questions that follow. A company has two service departments and two operating departments. The company allocates service departmental costs to Operating departments using the direct method. Operating data for these departments for last year are as follows: Service Departmentd Operating Department Cafeteria Custodial Cutting Molding Departmental costs $144,000 $84,000 $21,200 $52,500 Number of employees 35 30 60 90 Square feet occupied 1,600 800 2,100 1,500 Q. What is the total Molding Department cost after allocation under the direct method? ANS. $ Q. The company is considering to switch to the step-down method. Unther this method, Cafeteria costs are allocated first on the of number of employees and Custodial costs are allocated second on the basis of square feet occupied. What is the total Molding Department cost after allocation under the step-down method? ANS. $

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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