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. $
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter7: Allocating Costs Of Support Departments And Joint Products
Section: Chapter Questions
Problem 30E: A company uses charging rates to allocate service department costs to the using departments. The...
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