Fraiser company has four departments, of which assembly andfinishing are producing departments. Meanwhile, power and generalfactory are service (support) departments. The followinginformation pertains to the service (support) departments.
Power general factory Assembly Finishing Direct Costs 120,000 80,000 60,000 100,000 Power - 20% 30% 50% General factory 40% - 30% 30%
a) determine the total amount fo costs assigned to to theassembly and finishing departments assuming that you allocated theservice (support) department costs using the direct method(includes direct costs).
b) determine the total amount fo costs assigned to tothe assembly and finishing departments assuming that you allocatedthe service (support) department costs using the step (sequential)method ( includes diret costs). allocate general factory costsfirst.
c) give me the two equations to measure the total amount ofcosts to be allocated from the two support department using thereciprocal method.
d) what is the total costs to be allocated from the powerdepartment?
e) waht is the total costs to be allocated from the generalfactory department?
Fraiser company has four departments, of which assembly andfinishing are producing departments. Meanwhile, power and generalfactory are service (support) departments. The followinginformation pertains to the service (support) departments.
| Power | general factory | Assembly | Finishing | |
| Direct Costs | 120,000 | 80,000 | 60,000 | 100,000 |
| Power | - | 20% | 30% | 50% |
| General factory | 40% | - | 30% | 30% |
a) determine the total amount fo costs assigned to to theassembly and finishing departments assuming that you allocated theservice (support) department costs using the direct method(includes direct costs).
b) determine the total amount fo costs assigned to tothe assembly and finishing departments assuming that you allocatedthe service (support) department costs using the step (sequential)method ( includes diret costs). allocate general factory costsfirst.
c) give me the two equations to measure the total amount ofcosts to be allocated from the two support department using thereciprocal method.
d) what is the total costs to be allocated from the powerdepartment?
e) waht is the total costs to be allocated from the generalfactory department?
Related questions
Sequential (Step) Method of Support Department CostAllocation
Valron Company has two support departments, Human Resources andGeneral Factory, and two producing departments, Fabricating andAssembly.
| Support Departments | Producing Departments | ||||
| Human Resources | General Factory | Fabricating | Assembly | ||
| Direct costs | $180,000 | $310,000 | $114,400 | $99,000 | |
| Normal activity: | |||||
| Number of employees | â | 40 | 70 | 150 | |
| Square footage | 1,800 | â | 5,000 | 13,500 | |
Resources Department are allocated on the basis of number ofemployees, and the costs of General Factory are allocated on thebasis of square footage. Now assume that Valron Company uses thesequential method to allocate support department costs. The supportdepartments are ranked in order of highest cost to lowest cost.
Required:
1. Calculate the allocation ratios (rounded tofour significant digits) for the four departments using thesequential method. If an amount is zero, enter "0". Use the roundedvalues for subsequent calculations.
| Proportion of Driver Used by | ||||
| Human Resources | General Factory | Fabricating | Assembly | |
| Human Resources | ||||
| General Factory | ||||
2. Using the sequential method, allocate thecosts of the Human Resources and General Factory departments to theFabricating and Assembly departments. If an amount is zero,enter"0". Round your answers to the nearest dollar.
| Support Departments | Producing Departments | ||||
| Human Resources | General Factory | Fabricating | Assembly | ||
| Direct costs | $ | $ | $ | $ | |
| Allocate: | |||||
| General Factory | |||||
| Human Resources | |||||
| Total after allocation | $ | $ | $ | $ | |
Cornerstone Exercise 7.4 (Algorithmic)
Sequential (Step) Method of Support Department Cost Allocation
Valron Company has two support departments, Human Resources andGeneral Factory, and two producing departments, Fabricating andAssembly.
| Support Departments | Producing Departments | ||||
| Human Resources | General Factory | Fabricating | Assembly | ||
| Direct costs | $180,000 | $390,000 | $114,800 | $98,000 | |
| Normal activity: | |||||
| Number of employees | â | 40 | 70 | 160 | |
| Square footage | 2,000 | â | 5,900 | 13,500 | |
Resources Department are allocated on the basis of number ofemployees, and the costs of General Factory are allocated on thebasis of square footage. Valron Company uses the sequential methodto allocate support department costs. The support departments areranked in order of highest cost to lowest cost.
Required:
1. Calculate the allocation ratios (rounded tofour significant digits) for the four departments using thesequential method. If an amount is zero, enter "0". Use the roundedvalues for subsequent calculations.
| Proportion of Driver Used by | ||||
| Human Resources | General Factory | Fabricating | Assembly | |
| Human Resources | ||||
| General Factory | ||||
2. Using the sequential method, allocate thecosts of the Human Resources and General Factory departments to theFabricating and Assembly departments. If an amount is zero,enter"0". Round your answers to the nearest dollar.
| Support Departments | Producing Departments | ||||
| Human Resources | General Factory | Fabricating | Assembly | ||
| Direct costs | $ | $ | $ | $ | |
| Allocate: | |||||
| General Factory | |||||
| Human Resources | |||||
| Total after allocation | $ | $ | $ | $ | |
