Question
In: Accounting
Use the Direct Method to allocate Service Department Costs to the Operating Departments based on number...
-
Use the Direct Method to allocate Service Department Costs to the Operating Departments based on number (percentage) of employees.
Attacking Dept = 110 employees
Shark Dept = 135 employees
|
Service Dept. Maintenance |
Service Dept. Cafeteria |
Service Dept. Custodial |
Operating Dept. Painting |
Operating Dept. Welding |
|
|
Dept costs before allocation |
$200,000 |
110,000 |
275,000 |
500,000 |
850,000 |
|
Maintenance |
|||||
|
Cafeteria |
|||||
|
Custodial |
|||||
|
Total after allocation |
Solutions
Expert Solution
| Calculation of bases of allocation | |||||
| Painting dept | Operating dept | Total | |||
| 110 | 135 | 245 | |||
| % no. of employees | 45% | 55% | 100% | ||
| Allocation of costs | |||||
| Service dept | Operating dept | ||||
| Maintenance | Cafeteria | Custodial | Painting | Welding | |
| $ 200,000 | $ 110,000 | $ 275,000 | $ 500,000 | $ 850,000 | |
| Allocation of costs | |||||
| Maintenance | $ (200,000) | $ 89,796 | $ 110,204 | ||
| Cafeteria | $(110,000) | $ 49,388 | $ 60,612 | ||
| Custodial | $ (275,000) | $ 123,469 | $ 151,531 | ||
| Total after allocation | $ - | $ - | $ - | $ 762,653 | $1,172,347 |
For any clarification, please comment. Kindly Up Vote!
ekkarill92 answered 2 years agoRelated Solutions
Use the Direct Method to allocate Service Department Costs to the Operating Departments based on number...
Use the Direct Method to allocate Service Department Costs to
the Operating Departments based on number (percentage) of
employees.
Painting Dept = 110 employees
Welding Dept = 135 employees
Service Dept. Maintenance
Service Dept. Cafeteria
Service Dept. Custodial
Operating Dept. Painting
Operating Dept. Welding
Dept costs before allocation
$200,000
110,000
275,000
500,000
850,000
Maintenance
Cafeteria
Custodial
Total after allocation
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c.
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d.
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1.
Looking to compare, thanks.
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Direct Method
Step-down method (Allocate AS first)
Step -down method (Allocate IS first)
B) Compare and Explain differences in the support department
costs allocated to each operating department?
C) What approaches might be used to decide the sequence in which
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AS
IS
GOVT
CORP
Total
Budgeted
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8,000
20
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