Chapter 4, Problem 27BEA

Use the following information for Brief Exercises 4-27 and 4-28:

Quillen Company manufactures a product in a factory that has two producing departments, Cutting and Sewing, and two support departments, S1 and S2. The activity driver for S1 is number of employees, and the activity driver for S2 is number of maintenance hours. The following data pertain to Quillen:

Brief Exercises 4-27 (Appendix 4B) Assigning Support Department Costs by Using the Direct Method

Refer to the information for Quillen Company above.

Required:

1. Calculate the cost assignment ratios to be used under the direct method for Departments S1 and S2. (Note: Each support department will have two ratios—one for Cutting and the other for Sewing.)

2. Allocate the support department costs to the producing departments by using the direct method.