Chapter 4, Problem 34BEB

Use the following information for Brief Exercises 4-34 and 4-35:

Sanjay Company manufactures a product in a factory that has two producing departments, Assembly and Painting, and two support departments, S1 and S2. The activity driver for S1 is square footage, and the activity driver for S2 is number of machine hours. The following data pertain to Sanjay:

Brief Exercises 4-34 (Appendix 4B) Assigning Support Department Costs by Using the Direct Method

Refer to the information for Sanjay Company above.

Required:

1. 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 Assembly and the other for Painting.)
2. 2. Allocate the support department costs to the producing departments by using the direct method.