What might discourage the company from using this method? PR 19-2B Support Activity Cost Allocation Obj. 3- Allocate support department costs to production departments using the direct method, sequential method, and reciprocal services method. Kizzle's Crepes Co. produces world famous crepes. The company's crepes are produced via its Mixing and Cooking activities, which both rely on the Janitorial and Maintenance activities. Kizzle's management knows the most practical driver of Janitorial costs is square feet, but is uncertain whether to allocate Maintenance costs based on asset value of production equipment, number of service calls, or machine hours. Kizzle's management estimates that the Cooking and Mixing activities each require about twice as much space as the Maintenance activity. Instructions What factors should Kizzle's management consider in choosing the driver to use for the allocation of Maintenance costs? Of the three potential drivers mentioned in the problem, which one(s) should Kizzle's most likely not 1. use? 2. Assume that Kizzle's management allocates Maintenance costs based on the number of service calls. Further assume that in a given period, the Janitorial, Mixing, and Cooking activities incur 16, 40, and 24 service calls, respectively, and that the Janitorial and Maintenance costs of that period are $3,000 and $4,200, respectively. Determine the total costs allocated from each support activity to the other three activities using the reciprocal services method. Kizzle's Crepes Co. is expanding rapidly due to its exponentially growing sales and popularity. Kizzle's management is worried that as the ttps://ng.cengage.com/static/nbreader/ui/apps/nbreader/print_preview/print_preview.html? 2/2 3.
What might discourage the company from using this method? PR 19-2B Support Activity Cost Allocation Obj. 3- Allocate support department costs to production departments using the direct method, sequential method, and reciprocal services method. Kizzle's Crepes Co. produces world famous crepes. The company's crepes are produced via its Mixing and Cooking activities, which both rely on the Janitorial and Maintenance activities. Kizzle's management knows the most practical driver of Janitorial costs is square feet, but is uncertain whether to allocate Maintenance costs based on asset value of production equipment, number of service calls, or machine hours. Kizzle's management estimates that the Cooking and Mixing activities each require about twice as much space as the Maintenance activity. Instructions What factors should Kizzle's management consider in choosing the driver to use for the allocation of Maintenance costs? Of the three potential drivers mentioned in the problem, which one(s) should Kizzle's most likely not 1. use? 2. Assume that Kizzle's management allocates Maintenance costs based on the number of service calls. Further assume that in a given period, the Janitorial, Mixing, and Cooking activities incur 16, 40, and 24 service calls, respectively, and that the Janitorial and Maintenance costs of that period are $3,000 and $4,200, respectively. Determine the total costs allocated from each support activity to the other three activities using the reciprocal services method. Kizzle's Crepes Co. is expanding rapidly due to its exponentially growing sales and popularity. Kizzle's management is worried that as the ttps://ng.cengage.com/static/nbreader/ui/apps/nbreader/print_preview/print_preview.html? 2/2 3.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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I am stuck on #2 and I can't figure out the amounts, I some one to help with this step by step to the get the solutions.
Thank you in advance.
Transcribed Image Text:What might discourage the company from using this method?
PR 19-2B
Support Activity Cost Allocation
Obj. 3- Allocate support department costs to production departments using
the direct method, sequential method, and reciprocal services method.
Kizzle's Crepes Co. produces world famous crepes. The company's crepes
are produced via its Mixing and Cooking activities, which both rely on the
Janitorial and Maintenance activities. Kizzle's management knows the most
practical driver of Janitorial costs is square feet, but is uncertain whether to
allocate Maintenance costs based on asset value of production equipment,
number of service calls, or machine hours. Kizzle's management estimates
that the Cooking and Mixing activities each require about twice as much
space as the Maintenance activity.
Instructions
What factors should Kizzle's management consider in choosing the
driver to use for the allocation of Maintenance costs? Of the three potential
drivers mentioned in the problem, which one(s) should Kizzle's most likely not
1.
use?
2. Assume that Kizzle's management allocates Maintenance costs based on the
number of service calls. Further assume that in a given period, the Janitorial,
Mixing, and Cooking activities incur 16, 40, and 24 service calls, respectively,
and that the Janitorial and Maintenance costs of that period are $3,000 and
$4,200, respectively. Determine the total costs allocated from each support
activity to the other three activities using the reciprocal services method.
Kizzle's Crepes Co. is expanding rapidly due to its exponentially
growing sales and popularity. Kizzle's management is worried that as the
ttps://ng.cengage.com/static/nbreader/ui/apps/nbreader/print_preview/print_preview.html? 2/2
3.
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